Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 02, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | NUVASIVE, INC | |
Entity Central Index Key | 0001142596 | |
Entity Current Reporting Status | Yes | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2020 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | NUVA | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 51,252,708 | |
Entity Shell Company | false | |
Entity File Number | 000-50744 | |
Entity Tax Identification Number | 33-0768598 | |
Entity Address, Address Line One | 7475 Lusk Boulevard | |
Entity Address, City or Town | San Diego | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92121 | |
City Area Code | (858) | |
Local Phone Number | 909-1800 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Entity Interactive Data Current | Yes | |
Security Exchange Name | NASDAQ | |
Entity Incorporation, State or Country Code | DE | |
Document Quarterly Report | true | |
Document Transition Report | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 796,773 | $ 213,034 |
Short-term marketable securities | 130,054 | |
Accounts receivable, net of allowances of $20,057 and $17,019, respectively | 182,135 | 211,532 |
Inventory, net | 312,205 | 312,419 |
Prepaid income taxes | 18,655 | 10,434 |
Prepaid expenses and other current assets | 17,693 | 16,917 |
Total current assets | 1,457,515 | 764,336 |
Property and equipment, net | 279,162 | 266,318 |
Intangible assets, net | 177,607 | 201,092 |
Goodwill | 559,088 | 561,064 |
Operating lease right-of-use assets | 105,863 | 66,932 |
Deferred tax assets | 10,036 | 9,162 |
Restricted cash and investments | 1,494 | 1,494 |
Convertible note hedge derivative | 44,936 | |
Other assets | 14,268 | 14,892 |
Total assets | 2,649,969 | 1,885,290 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 103,821 | 97,160 |
Contingent consideration liabilities | 5,683 | 15,727 |
Accrued payroll and related expenses | 41,892 | 86,458 |
Operating lease liabilities | 7,502 | 5,567 |
Income tax liabilities | 394 | 2,005 |
Senior convertible notes | 634,142 | |
Total current liabilities | 793,434 | 206,917 |
Long-term senior convertible notes | 746,719 | 623,298 |
Embedded conversion derivative | 44,936 | |
Deferred and income tax liabilities | 9,657 | 14,655 |
Operating lease liabilities | 114,881 | 73,153 |
Other long-term liabilities | 45,452 | 52,060 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value; 5,000,000 shares authorized, none outstanding | ||
Common stock, $0.001 par value; 120,000,000 shares authorized at June 30, 2020 and December 31, 2019, 57,779,397 and 57,524,658 issued and outstanding at June 30, 2020 and December 31, 2019, respectively | 62 | 62 |
Additional paid-in capital | 1,536,156 | 1,429,854 |
Accumulated other comprehensive loss | (12,175) | (9,418) |
Retained earnings | 37,758 | 82,475 |
Treasury stock at cost; 6,528,294 shares and 5,379,536 shares at June 30, 2020 and December 31, 2019, respectively | (666,911) | (587,766) |
Total equity | 894,890 | 915,207 |
Total liabilities and equity | $ 2,649,969 | $ 1,885,290 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Statement Of Financial Position [Abstract] | ||
Accounts receivable, allowances | $ 20,057 | $ 17,019 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 120,000,000 | 120,000,000 |
Common stock, shares issued | 57,779,397 | 57,524,658 |
Common stock, shares outstanding | 57,779,397 | 57,524,658 |
Treasury stock at cost, shares | 6,528,294 | 5,379,536 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Net sales: | ||||
Net sales | $ 203,612 | $ 292,105 | $ 463,493 | $ 566,881 |
Cost of sales (excluding below amortization of intangible assets): | ||||
Cost of sales | 80,505 | 77,579 | 152,370 | 152,073 |
Gross profit | 123,107 | 214,526 | 311,123 | 414,808 |
Operating expenses: | ||||
Selling, general and administrative | 126,444 | 152,853 | 256,675 | 297,929 |
Research and development | 19,406 | 17,553 | 37,663 | 35,128 |
Amortization of intangible assets | 12,675 | 12,277 | 25,324 | 25,902 |
Purchase of in-process research and development | 1,011 | 1,011 | ||
Business transition costs | 874 | 1,646 | (566) | 5,479 |
Total operating expenses | 160,410 | 184,329 | 320,107 | 364,438 |
Interest and other expense, net: | ||||
Interest income | 304 | 327 | 1,035 | 736 |
Interest expense | (16,524) | (9,650) | (28,041) | (19,163) |
Other (expense) income, net | (11,662) | 9 | (19,070) | (357) |
Total interest and other expense, net | (27,882) | (9,314) | (46,076) | (18,784) |
(Loss) income before income taxes | (65,185) | 20,883 | (55,060) | 31,586 |
Income tax benefit (expense) | 15,170 | (5,921) | 10,343 | (7,238) |
Consolidated net (loss) income | $ (50,015) | $ 14,962 | $ (44,717) | $ 24,348 |
Net (loss) income per share: | ||||
Basic | $ (0.98) | $ 0.29 | $ (0.87) | $ 0.47 |
Diluted | $ (0.98) | $ 0.29 | $ (0.87) | $ 0.46 |
Weighted average shares outstanding: | ||||
Basic | 51,224 | 51,967 | 51,531 | 51,822 |
Diluted | 51,224 | 52,460 | 51,531 | 52,471 |
Product [Member] | ||||
Net sales: | ||||
Net sales | $ 183,664 | $ 261,381 | $ 418,351 | $ 505,204 |
Cost of sales (excluding below amortization of intangible assets): | ||||
Cost of sales | 64,373 | 57,613 | 116,018 | 112,099 |
Service [Member] | ||||
Net sales: | ||||
Net sales | 19,948 | 30,724 | 45,142 | 61,677 |
Cost of sales (excluding below amortization of intangible assets): | ||||
Cost of sales | $ 16,132 | $ 19,966 | $ 36,352 | $ 39,974 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Consolidated net (loss) income | $ (50,015) | $ 14,962 | $ (44,717) | $ 24,348 |
Other comprehensive income (loss): | ||||
Unrealized loss on marketable securities, net of tax | (48) | (48) | ||
Translation adjustments, net of tax | 1,100 | 570 | (2,709) | 76 |
Other comprehensive income (loss) | 1,052 | 570 | (2,757) | 76 |
Total consolidated comprehensive (loss) income | $ (48,963) | $ 15,532 | $ (47,474) | $ 24,424 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Loss [Member] | Retained Earnings [Member] | Treasury Stock [Member] |
Beginning Balance at Dec. 31, 2018 | $ 834,525 | $ 61 | $ 1,397,829 | $ (8,628) | $ 17,241 | $ (571,978) |
Beginning Balance, Shares at Dec. 31, 2018 | 56,648 | (5,116) | ||||
Issuance of common stock under employee and director equity option and purchase plans | (8,177) | $ 0 | 202 | 0 | 0 | $ (8,379) |
Issuance of common stock under employee and director equity option and purchase plans, Shares | 399 | (146) | ||||
Stock-based compensation expense | 4,766 | $ 0 | 4,766 | 0 | 0 | $ 0 |
Issuance of common stock in connection with royalty milestone achievement | 0 | $ 0 | 0 | 0 | 0 | 0 |
Issuance of common stock in connection with royalty milestone achievement, Shares | 72 | |||||
Consolidated net income (loss) | 9,386 | $ 0 | 0 | 0 | 9,386 | 0 |
Other comprehensive (loss) income | (494) | 0 | 0 | (494) | 0 | 0 |
Ending Balance at Mar. 31, 2019 | 840,006 | $ 61 | 1,402,797 | (9,122) | 26,627 | $ (580,357) |
Ending Balance, Shares at Mar. 31, 2019 | 57,119 | (5,262) | ||||
Beginning Balance at Dec. 31, 2018 | 834,525 | $ 61 | 1,397,829 | (8,628) | 17,241 | $ (571,978) |
Beginning Balance, Shares at Dec. 31, 2018 | 56,648 | (5,116) | ||||
Consolidated net income (loss) | 24,348 | |||||
Other comprehensive (loss) income | 76 | |||||
Ending Balance at Jun. 30, 2019 | 862,724 | $ 62 | 1,413,934 | (8,552) | 41,589 | $ (584,309) |
Ending Balance, Shares at Jun. 30, 2019 | 57,357 | (5,328) | ||||
Beginning Balance at Mar. 31, 2019 | 840,006 | $ 61 | 1,402,797 | (9,122) | 26,627 | $ (580,357) |
Beginning Balance, Shares at Mar. 31, 2019 | 57,119 | (5,262) | ||||
Issuance of common stock under employee and director equity option and purchase plans | 364 | $ 1 | 4,315 | 0 | 0 | $ (3,952) |
Issuance of common stock under employee and director equity option and purchase plans, Shares | 238 | (66) | ||||
Stock-based compensation expense | 6,822 | $ 0 | 6,822 | 0 | 0 | $ 0 |
Consolidated net income (loss) | 14,962 | 0 | 0 | 0 | 14,962 | 0 |
Other comprehensive (loss) income | 570 | 0 | 0 | 570 | 0 | 0 |
Ending Balance at Jun. 30, 2019 | 862,724 | $ 62 | 1,413,934 | (8,552) | 41,589 | $ (584,309) |
Ending Balance, Shares at Jun. 30, 2019 | 57,357 | (5,328) | ||||
Beginning Balance at Dec. 31, 2019 | 915,207 | $ 62 | 1,429,854 | (9,418) | 82,475 | $ (587,766) |
Beginning Balance, Shares at Dec. 31, 2019 | 57,525 | (5,380) | ||||
Issuance of common stock under employee and director equity option and purchase plans | (3,818) | $ 0 | 119 | 0 | 0 | $ (3,937) |
Issuance of common stock under employee and director equity option and purchase plans, Shares | 167 | (59) | ||||
Stock-based compensation expense | 2,786 | $ 0 | 2,786 | 0 | 0 | $ 0 |
Tax benefits related to convertible note issuance | 484 | 0 | 484 | 0 | 0 | 0 |
Shares repurchased | (75,000) | $ 0 | 0 | 0 | 0 | $ (75,000) |
Shares repurchased ,Shares | 0 | (1,085) | ||||
Sale of warrants | 47,070 | $ 0 | 47,070 | 0 | 0 | $ 0 |
Convertible note hedge | (78,300) | 0 | (78,300) | 0 | 0 | 0 |
Equity component of convertible note issuance | 78,268 | 0 | 78,268 | 0 | 0 | 0 |
Debt issuance costs attributable to convertible feature | (1,987) | 0 | (1,987) | 0 | 0 | 0 |
Consolidated net income (loss) | 5,298 | 0 | 0 | 0 | 5,298 | 0 |
Other comprehensive (loss) income | (3,809) | 0 | 0 | (3,809) | 0 | 0 |
Ending Balance at Mar. 31, 2020 | 886,199 | $ 62 | 1,478,294 | (13,227) | 87,773 | $ (666,703) |
Ending Balance, Shares at Mar. 31, 2020 | 57,692 | (6,524) | ||||
Beginning Balance at Dec. 31, 2019 | 915,207 | $ 62 | 1,429,854 | (9,418) | 82,475 | $ (587,766) |
Beginning Balance, Shares at Dec. 31, 2019 | 57,525 | (5,380) | ||||
Consolidated net income (loss) | (44,717) | |||||
Other comprehensive (loss) income | (2,757) | |||||
Ending Balance at Jun. 30, 2020 | 894,890 | $ 62 | 1,536,156 | (12,175) | 37,758 | $ (666,911) |
Ending Balance, Shares at Jun. 30, 2020 | 57,779 | (6,528) | ||||
Beginning Balance at Mar. 31, 2020 | 886,199 | $ 62 | 1,478,294 | (13,227) | 87,773 | $ (666,703) |
Beginning Balance, Shares at Mar. 31, 2020 | 57,692 | (6,524) | ||||
Issuance of common stock under employee and director equity option and purchase plans | 3,663 | $ 0 | 3,871 | 0 | 0 | $ (208) |
Issuance of common stock under employee and director equity option and purchase plans, Shares | 87 | (4) | ||||
Stock-based compensation expense | 7,081 | $ 0 | 7,081 | 0 | 0 | $ 0 |
Sale of warrants | 46,845 | 0 | 46,845 | 0 | 0 | 0 |
Debt issuance costs attributable to convertible feature | 65 | 0 | 65 | 0 | 0 | 0 |
Consolidated net income (loss) | (50,015) | 0 | 0 | 0 | (50,015) | 0 |
Other comprehensive (loss) income | 1,052 | 0 | 0 | 1,052 | 0 | 0 |
Ending Balance at Jun. 30, 2020 | $ 894,890 | $ 62 | $ 1,536,156 | $ (12,175) | $ 37,758 | $ (666,911) |
Ending Balance, Shares at Jun. 30, 2020 | 57,779 | (6,528) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Operating activities: | ||
Consolidated net (loss) income | $ (44,717) | $ 24,348 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Depreciation and amortization | 70,138 | 67,614 |
Amortization of non-cash interest | 18,573 | 10,494 |
Stock-based compensation | 2,235 | 12,618 |
Reserves on current assets | 33,148 | 8,267 |
Purchase of in-process research and development | 1,011 | |
Net loss on strategic investments | 1,411 | |
Net loss recognized on change in fair value of derivatives | 12,301 | |
Other non-cash adjustments | 7,686 | 6,299 |
Deferred income taxes | (5,712) | 5,721 |
Changes in operating assets and liabilities, net of effects from acquisitions: | ||
Accounts receivable | 25,132 | (11,602) |
Inventory | (32,997) | (31,856) |
Prepaid expenses and other current assets | (2,727) | (2,811) |
Accounts payable and accrued liabilities | 1,319 | 9,166 |
Accrued payroll and related expenses | (44,388) | (3,699) |
Income taxes | (9,306) | (1,128) |
Net cash provided by operating activities | 33,107 | 93,431 |
Investing activities: | ||
Acquisitions and investments | (4,100) | |
Purchases of intangible assets | (2,490) | (6,827) |
Purchases of property and equipment | (52,065) | (65,385) |
Purchases of marketable securities | (130,096) | |
Net cash used in investing activities | (184,651) | (76,312) |
Financing activities: | ||
Proceeds from the issuance of common stock | 3,871 | 3,888 |
Purchases of treasury stock | (79,026) | (11,702) |
Payment of contingent consideration | (7,053) | (809) |
Proceeds from issuance of convertible debt, net of issuance costs | 874,404 | |
Proceeds from sale of warrants | 93,915 | |
Purchases of convertible note hedges | (147,825) | |
Other financing activities | (2,307) | 1,769 |
Net cash provided by (used in) financing activities | 735,979 | (6,854) |
Effect of exchange rate changes on cash | (696) | 271 |
Increase in cash, cash equivalents and restricted cash | 583,739 | 10,536 |
Cash, cash equivalents and restricted cash at beginning of period | 214,528 | 120,235 |
Cash, cash equivalents and restricted cash at end of period | $ 798,267 | $ 130,771 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2020 | Jun. 30, 2019 |
Statement Of Cash Flows [Abstract] | ||
Cash and cash equivalents | $ 796,773 | $ 128,377 |
Restricted cash | 1,494 | 2,394 |
Total cash, cash equivalents and restricted cash shown in the Unaudited Consolidated Statement of Cash Flows | $ 798,267 | $ 130,771 |
Description of Business and Bas
Description of Business and Basis of Presentation | 6 Months Ended |
Jun. 30, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Description of Business and Basis of Presentation | 1. Description of Business and Basis of Presentation Description of Business NuVasive, Inc. (the “Company” or “NuVasive”) was incorporated in Delaware on July 21, 1997, and began commercializing its products in 2001. The Company’s principal product offering includes a minimally disruptive surgical platform called Maximum Access Surgery, or MAS. The MAS platform combines three categories of solutions that collectively minimize soft tissue disruption during spine fusion surgery, provide maximum visualization and are designed to enable safe and reproducible outcomes for the surgeon and the patient. The platform includes the Company’s proprietary software-driven nerve detection and avoidance systems and Intraoperative Monitoring (“IOM”) services and support; MaXcess, an integrated split-blade retractor system; and a wide variety of specialized implants and biologics. To assist with surgical procedures, the Company offers a technology platform called Integrated Global Alignment (“iGA”), in which products and computer assisted technology under the MAS platform help achieve more precise spinal alignment. The individual components of the MAS platform, and many of the Company’s products, can also be used in open or traditional spine surgery. The Company continues to focus research and development efforts to expand its MAS product platform and advance the applications of its unique technology into procedurally integrated surgical solutions. The Company dedicates significant resources toward training spine surgeons on its unique technology and products. The Company’s procedurally integrated solutions use innovative, technological advancements and the MAS platform to provide surgical efficiency, operative reliability, and procedural versatility. The Company offers a range of implants for spinal surgery, which include its porous titanium and polyetheretherketone (“PEEK”) implants under its Advanced Materials Science portfolio, fixation products such as customizable rods, plates and screws, bone allograft in patented saline packaging, allogeneic and synthetic biologics, and disposables used in IOM. The Company makes available MAS instrument sets, MaXcess and neuromonitoring systems to hospitals to facilitate surgeon access to the spine to perform restorative and fusion procedures using the Company’s implants and fixation products. The Company sells MAS instrument sets, MaXcess and neuromonitoring systems to hospitals, however, such sales are immaterial to the Company’s results of operations. The Company also designs and sells expandable growing rod implant systems that can be non-invasively lengthened following implantation with precise, incremental adjustments via an external remote controller using magnetic technology called MAGnetic External Control, or MAGEC, which allows for the minimally invasive treatment of early-onset and adolescent scoliosis. This technology is also the basis for the Company’s Precice limb lengthening system, which allows for the correction of long bone limb length discrepancy, as well as enhanced bone healing in patients that have experienced traumatic injury. The Company has developed a procedural solution for spine surgery that includes IOM services, iGA and hardware and software technology offerings. The Company has also invested in the development of capital equipment designed to further improve clinical and economic outcomes through proceduralization, including LessRay and Pulse. LessRay is an image enhancement platform designed to reduce radiation exposure in the operating room by allowing surgeons to take low-quality, low-dose images and improve them to look like conventional full-dose images. Pulse In December 2019, a novel strain of coronavirus, which causes COVID-19, was identified. Due to the rapid and global spread of the virus, on March 11, 2020, the World Health Organization declared the COVID-19 outbreak a pandemic. To slow the proliferation of COVID-19, governments domestically and around the world have implemented extraordinary measures, which include the mandatory closure of businesses, restrictions on travel and gatherings, and quarantine and physical distancing requirements. In addition, many government agencies in conjunction with hospitals and healthcare systems have, to varying degrees, deferred or suspended elective surgical procedures. While certain spine surgeries are deemed essential and certain surgeries, like in cases of trauma, cannot be delayed, the Company has seen and may continue to see a significant reduction in procedural volumes as hospital systems and/or patients elect to defer spine surgery procedures. As a result of these measures, the Company has experienced substantial reductions in procedural volumes and anticipates this trend will continue during the pandemic. Although the Company cannot predict the specific extent, duration, or scope of the impact that the COVID-19 pandemic will have on its financial results, the Company has experienced, and may continue to experience, material declines in its net sales, cash flow, and/or profitability in one or more quarterly periods in 2020 compared to the corresponding prior-year periods and compared to its expectations at the beginning of the 2020 fiscal year. Basis of Presentation and Principles of Consolidation The accompanying Unaudited Consolidated Financial Statements include the accounts of the Company and its majority-owned or controlled subsidiaries, collectively referred to as either NuVasive or the Company. The Company translates the financial statements of its foreign subsidiaries using end-of-period exchange rates for assets and liabilities and average exchange rates during each reporting period for results of operations. When there is a portion of equity in an acquired subsidiary not attributable, directly or indirectly, to the respective parent entity, the Company records the fair value of the non-controlling interest at the acquisition date and classifies the amounts attributable to non-controlling interest separately in equity in the Company's Consolidated Financial Statements. Any subsequent changes in a parent's ownership interest while the parent retains its controlling financial interest in its subsidiary are accounted for as equity transactions. All significant intercompany balances and transactions have been eliminated in consolidation. The Company has replaced the caption “Revenue” with “Net sales,” and the caption “Sales, marketing and administrative” with “Selling, general and administrative,” within the Unaudited Consolidated Statements of Operations and corresponding changes have been made throughout this Quarterly Report to conform to this presentation. These updated captions have no impact on previously reported results of operations or financial position. The accompanying Unaudited Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Pursuant to these rules and regulations, the Company has condensed or omitted certain information and footnote disclosures it normally includes in its annual Consolidated Financial Statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). Operating results for the three and six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for any other interim period or for the full year. These Unaudited Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto for the year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K filed with the SEC. In the opinion of management, the Unaudited Consolidated Financial Statements and notes thereto include all adjustments that are of a normal and recurring nature that are necessary for the fair presentation of the Company’s financial position and of the results of operations and cash flows for the periods presented. Use of Estimates To prepare financial statements in conformity with GAAP, management must make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Recent Accounting Pronouncements Not Yet Adopted In January 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the Emerging Issues Task Force) Recently Adopted Accounting Standards In June 2016, the FASB issued Accounting Standards Update No. 2016-13, Financial Instruments – Credit Losses (“ASU 2016-13”), which changes the accounting for recognizing impairments of financial assets. Under the new guidance, credit losses for certain types of financial instruments will be estimated based on expected losses. The new guidance also modifies the impairment models for available-for-sale debt securities and for purchased financial assets with credit deterioration since their origination. no In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles – Goodwill and Other In August 2018, the FASB issued Accounting Standards Update No. 2018-13, Fair Value Measurement: Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which adds and modifies certain disclosure requirements for fair value measurements. Under the new guidance, entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, or valuation processes for Level 3 fair value measurements. However, public companies will be required to disclose the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and related changes in unrealized gains and losses included in other comprehensive income. The Company adopted ASU 2018-13 as of January 1, 2020. The adoption did not have a material impact on the Company’s Unaudited Consolidated Financial Statements. See Note 3 to the Unaudited Consolidated Financial Statements for further discussion on fair value measurements. In September 2018, the FASB issued Accounting Standards Update No. 2018-15, Intangible – Goodwill and Other – Internal-Use Software In March 2020, the FASB issued Accounting Standards Update No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting provides temporary optional expedients and exceptions to the guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates. The relief is temporary and generally cannot be applied to contract modifications that occur after December 31, 2022 or hedging relationships entered into or evaluated after that date. In December 2019, the FASB issued Accounting Standards Update No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which modifies Accounting Standard Codification 740 – Income Taxes (“ASC 740”), to simplify the accounting for income taxes. ASU 2019-12 enhances and simplifies various aspects of the income tax accounting guidance in ASC 740. This update is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years, and early adoption is permitted. The Company elected to early adopt ASU 2019-12 in the quarter ended June 30, 2020. The Company applied the updated guidance for year-to-date losses in the Company’s interim period tax accounting on a prospective basis. The early adoption had no impact on the expected full year tax expense for 2020, and increased the recognition of approximately $2.9 million of tax benefit into the quarter ended June 30, 2020 that would otherwise have been limited under ASC 740. Revenue Recognition In accordance with Accounting Standards Codification 606 Revenue from Contracts with Customers (“ASC 606”), the Company recognizes revenue upon the transfer of goods or services to a customer at an amount that reflects the expected consideration to be received in exchange for those goods or services. The principles in ASC 606 are applied using the following five steps: (i) identify the contract with a customer; (ii) identify the performance obligation(s) in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation(s) in the contract; and (v) recognize revenue when (or as) the Company satisfies its performance obligation(s). Specifically, revenue from the sale of implants, fixation products and disposables is generally recognized at an amount that reflects the expected consideration upon notice that the Company’s products have been used in a surgical procedure or upon shipment to a third-party customer assuming control of the products. Revenue from IOM services is recognized in the period the service is performed for the amount of consideration expected to be received. Revenue from the sale of surgical instrument sets is generally recognized upon receipt of a purchase order and the subsequent shipment to a customer who assumes control. In certain cases, the Company does offer the ability for customers to lease surgical instrumentation primarily on a non-sales type basis. Revenue from the sale or lease of capital equipment is generally recognized following the execution of a contract and upon the installation of the equipment and the acceptance by the customer. Selling and leasing of surgical instrument sets and capital equipment represents an immaterial amount of the Company’s total net sales in all periods presented. Revenue associated with products holding rights of return or trade-in are recognized when the Company concludes there is not a risk of significant revenue reversal in future periods for the expected consideration in the transaction. Costs incurred by the Company associated with sales contracts with customers are deferred over the performance obligation period and recognized in the same period as the related revenue, with the exception of contracts that complete within one year or less, in which case the associated costs are expensed as incurred. Allowance for Credit Losses The Company maintains an allowance for credit losses resulting from the inability of its customers, including hospitals, ambulatory surgery centers, and distributors, Historically, the Company’s reserves have been adequate to cover credit losses. The Company's exposure to credit losses may increase if its customers are adversely affected by changes in healthcare laws, coverage and reimbursement, economic pressures or uncertainty associated with local or global economic recessions, disruption associated with the current COVID-19 pandemic, or other customer-specific factors. It is possible that there could be a material adverse impact from potential adjustments of the carrying amount of trade receivables as customers’ cash flows are impacted by their response to the COVID-19 pandemic and the deferral of elective surgical procedures. In accordance with ASU 2016-13, the Company no longer evaluates whether its available-for-sale debt securities in an unrealized loss position are other-than-temporarily impaired. Instead, the Company assesses whether such unrealized loss positions are credit-related. The credit-related portion of unrealized losses, and any subsequent improvements, are recorded in interest income in the Unaudited Consolidated Statement of Operations through an allowance for credit losses. Unrealized gains and losses that are not credit-related are included in accumulated other comprehensive (loss) income. The following table summarizes the changes in the allowance for credit losses: (in thousands) June 30, 2020 Allowance for credit losses at January 1, 2020 $ 9,423 Current-period provision for expected losses 1,441 Write-offs charged against the allowance (406 ) Recoveries of amounts previously written off 48 Changes resulting from foreign currency fluctuations (80 ) Allowance for credit losses at end of period $ 10,426 Inventory, Net Net inventory as of June 30, 2020 Finished goods primarily consists of specialized implants, fixation products and disposables and are stated at the lower of cost or net realizable value determined by utilizing a standard cost method, which includes capitalized variances, which approximates the weighted average cost. Work in progress and raw materials represent the underlying material, and labor for work in progress, that ultimately yield finished goods upon completion and are subject to lower of cost or net realizable value. The Company reviews the components of its inventory on a periodic basis for excess and obsolescence and adjusts inventory to its net realizable value as necessary. The Company provides an inventory reserve for estimated excess and obsolete inventory based upon historical turnover and assumptions about future demand for its products and market conditions. The Company’s allograft products have shelf lives ranging from two to five years and are subject to demand fluctuations based on the availability and demand for alternative products. The Company’s inventory, which consists primarily of disposables, specialized implants and fixation products, is at risk of obsolescence following the introduction and development of new or enhanced products. A stated goal of the Company is to focus on continual product innovation and to obsolete its own products, which increases the risk that products will become obsolete prior to the end of their anticipated useful life. The Company’s estimates and assumptions for excess and obsolete inventory are reviewed and updated on a quarterly basis. The estimates the Company uses for demand are also used for near-term capacity planning and inventory purchasing and are consistent with its revenue forecasts. Increases in the reserve for excess and obsolete inventory result in a corresponding charge to cost of sales. For the three months ended June 30, 2020 and 2019, the Company recorded a reserve for excess and obsolete inventory of $25.2 million and $3.3 million, respectively. For the six months ended June 30, 2020 and 2019, the Company recorded a reserve for excess and obsolete inventory of $30.5 million and $6.4 million, respectively. The increase is primarily attributable to updates to the Company’s estimates and assumptions about future demand for certain spinal hardware products associated with market conditions affected by the COVID-19 pandemic. Derivative Financial Instruments The Company recognizes all derivative instruments as assets or liabilities in its Unaudited Consolidated Balance Sheets Comprehensive Income Comprehensive income is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources. Comprehensive income includes net of tax, unrealized gains or losses on the Company’s marketable securities and foreign currency translation adjustments. The cumulative translation adjustments included in accumulated other comprehensive loss were $12.2 million and $9.4 million at June 30, 2020 and December 31, 2019, respectively. Product Shipment Costs Product shipment costs, included in selling, general and administrative expense in the accompanying Unaudited Consolidated Statements of Operations, were $5.7 million and $12.1 million for the three and six months ended June 30, 2020, respectively, and $6.9 million and $13.3 million for the three and six months ended June 30, 2019, respectively. The majority of the Company’s shipping costs are associated with providing instrument sets to hospitals for use in individual surgical procedures. Amounts billed to customers for shipping and handling of products are reflected in net sales and are not material for any period presented. Business Transition Costs The Company incurs certain costs related to acquisition, integration and business transition activities, which include severance, relocation, consulting, leasehold exit costs, third-party merger and acquisition costs, contingent consideration fair value adjustments and other costs directly associated with such activities. Contingent consideration is accrued based on the fair value of the expected payment, and such accruals are subject to increase or decrease based on the assessment of the likelihood that the contingent milestones will be achieved resulting in payment. If an accrual for contingent consideration decreases during a particular period, it results in a reduction of costs during such period. During the three months ended June 30, 2020 0.5 June 30, 2020 T he Company recorded $1.6 million and $5.5 million , respectively. For the three months ended June 30, 2019, such costs consisted primarily of fair value adjustments on contingent consideration liabilities associated with the Company’s 2017 and 2016 acquisitions. For the six months ended June 30, 2019, such costs related to acquisition, integration and business transition activities, which included $ |
Net (Loss) Income Per Share
Net (Loss) Income Per Share | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Net (Loss) Income Per Share | 2. Net (Loss) Income Per Share The following table sets forth the computation of basic and diluted consolidated net (loss) income per share: Three Months Ended June 30, Six Months Ended June 30, ( in thousands, except per share data 2020 2019 2020 2019 Numerator: Net (loss) income $ (50,015 ) $ 14,962 $ (44,717 ) $ 24,348 Denominator for basic and diluted net (loss) income per share: Weighted average common shares outstanding for basic 51,224 51,967 51,531 51,822 Dilutive potential common stock outstanding: Stock options and employee stock purchase plan — 14 — 15 Restricted stock units — 479 — 634 Weighted average common shares outstanding for diluted 51,224 52,460 51,531 52,471 Basic net (loss) income per share $ (0.98 ) $ 0.29 $ (0.87 ) $ 0.47 Diluted net (loss) income per share $ (0.98 ) $ 0.29 $ (0.87 ) $ 0.46 The following weighted average outstanding common stock equivalents were not included in the calculation of net (loss) income per diluted share because their effects were anti-dilutive: Three Months Ended June 30, Six Months Ended June 30, ( in thousands 2020 2019 2020 2019 Stock options, employee stock purchase plan, and restricted stock units 1,112 60 621 163 Warrants 18,783 10,865 17,236 10,865 Senior Convertible Notes 15,689 10,865 10,257 10,865 Total 35,584 21,790 28,114 21,893 |
Financial Instruments and Fair
Financial Instruments and Fair Value Measurements | 6 Months Ended |
Jun. 30, 2020 | |
Investments Debt And Equity Securities [Abstract] | |
Financial Instruments and Fair Value Measurements | 3. Financial Instruments and Fair Value Measurements Short-Term Marketable Securities The Company invests in available-for-sale marketable debt securities consisting of corporate notes and commercial paper. The Company has the ability, if necessary, to liquidate any short-term marketable securities to meet its liquidity needs in the next 12 months. As such, those investments with contractual maturities greater than one year from the date of purchase are classified as short-term on the accompanying Unaudited Consolidated Balance Sheets . The carrying value and amortized cost of the Company’s marketable securities, summarized by major security type, consisted of the following: ( in thousands Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value June 30, 2020: Debt securities, available for sale: Corporate notes $ 22,298 $ — $ (41 ) $ 22,257 Commercial paper 107,804 13 (20 ) 107,797 Total debt securities, available for sale $ 130,102 $ 13 $ (61 ) $ 130,054 Contractual maturities of marketable debt securities consisted of the following: ( in thousands Fair Value June 30, 2020: Debt securities, available for sale: Due within one year $ 117,898 Due within one to two years 12,156 Total debt securities, available for sale $ 130,054 The Company determines whether a decline in the fair value below the amortized cost basis of available-for-sale securities is due to credit-related factors. At each reporting date, the Company performs an evaluation of impairment to determine if any unrealized losses are the result of credit losses. Impairment is assessed at the individual security level. Factors considered in determining whether a loss resulted from a credit loss or other factors include the Company’s intent and ability to hold the investment until the recovery of its amortized cost basis, the extent to which the fair value is less than the amortized cost basis, the length of time and extent to which fair value has been less than the cost basis, the financial condition of the issuer, any historical failure of the issuer to make scheduled interest or principal payments, any changes to the rating of the security by a rating agency, any adverse legal or regulatory events affecting the issuer or issuer’s industry, and any significant deterioration in economic conditions. Unrealized losses on available-for-sale debt securities as of June 30, 2020 were not significant and were primarily due to changes in interest rates, including market credit spreads, and not due to increased credit risks associated with specific securities. Accordingly, the Company has not recorded an allowance for credit losses with these investments. Foreign Currency and Derivative Financial Instruments The Company translates the financial statements of its foreign subsidiaries using end-of-period exchange rates for assets and liabilities and average exchange rates during each reporting period for results of operations. Some of the Company’s reporting entities conduct a portion of their business in currencies other than the entity’s functional currency. These transactions give rise to receivables and payables that are denominated in currencies other than the entity’s functional currency. The value of these receivables and payables is subject to changes in currency exchange rates from the point at which the transactions are originated until the settlement in cash. Both realized and unrealized gains and losses in the value of these receivables and payables are included in the determination of net income. Currency exchange gains (losses), which include gains and losses from derivative instruments, were $0.6 million and $(5.2) million for the three and six months ended June 30, 2020, respectively, and 0.1 $( 0.2 three and six months ended June 30, 2019 respectively, and are included in other (expense) income, net in the Unaudited Consolidated Statements of Operations. To manage foreign currency exposure risks, the Company uses derivatives for activities in entities that have short-term intercompany receivables and payables denominated in a currency other than the entity’s functional currency. A s of June 30, 2020 and December 31, 2019 a notional principal amount of $18.0 million and $ 26.9 was outstanding to hedge currency risk relative to the Company’s foreign receivables and payables . Derivative instrument net (losses) gains on the Company’s forward exchange contracts were $(0.2) for the three and six months ended June 30, 2020, respectively, and $( 0.4 $( 0.1 three and six months ended as of June 30, 2020 and December 31, 2019, respectively. The derivative instruments are recorded in other current assets or other current liabilities in the Unaudited Consolidated Balance Sheets commensurate with the nature of the instrument at period end. Fair Value Measurements The Company measures certain assets and liabilities in accordance with authoritative guidance, which requires fair value measurements be classified and disclosed in one of the following three categories: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. Assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurements. The Company reviews the fair value hierarchy classification on a quarterly basis. Changes in the ability to observe valuation inputs may result in a reclassification of levels for certain assets or liabilities within the fair value hierarchy. The Company did not have any transfers of assets and liabilities between the levels of the fair value measurement hierarchy during the periods presented. The fair values of the Company’s assets and liabilities, including cash equivalents, marketable debt securities, restricted investments, derivatives, and contingent consideration are measured at fair value on a recurring basis. As of June 30, 2020 and December 31, 201 9 , the Company held investments in securities classified as cash equivalents. Realized gains and losses and interest income related to marketable securities were immaterial during all periods presented. Cash equivalents are determined under the fair value categories as follows: Quoted Price in Significant Other Significant Active Market Observable Inputs Unobservable ( in thousands Total (Level 1) (Level 2) Inputs (Level 3) June 30, 2020: Cash equivalents: Money market funds $ 711,260 $ 711,260 $ — $ — Commercial paper 11,997 — 11,997 — Total cash equivalents 723,257 711,260 11,997 — Debt securities, available for sale: Corporate notes 22,258 — 22,258 — Commercial paper 107,796 — 107,796 — Total debt securities, available for sale 130,054 — 130,054 — Total assets measured at fair value $ 853,311 $ 711,260 $ 142,051 $ — December 31, 2019: Cash equivalents: Money market funds $ 151,750 $ 151,750 $ — $ — Total cash equivalents $ 151,750 $ 151,750 $ — $ — The carrying amounts of certain financial instruments such as cash and cash equivalents, accounts receivable, prepaid expenses, other current assets, accounts payable, accrued expenses, and other current liabilities as of June 30, 2020 and December 31, 2019 approximate their related fair values due to the short-term maturities of these instruments. The fair value of certain financial instruments was measured and classified within Level 1 of the fair value hierarchy based on quoted prices. Fair Value of Senior Convertible Notes The fair value, based on a quoted market price (Level 1), of the Company’s outstanding $650.0 million principal amount of Senior Convertible Notes due 2021 at June 30, 2020 and December 31, 2019 was approximately $703.6 million and $869.3 million, respectively. The fair value, based on a quoted market price (Level 1), of the Company’s outstanding $450.0 million principal amount of Senior Convertible Notes due 2023 at June 30, 2020 was approximately $429.2 million. The fair value, based on a quoted market price (Level 1), of the Company’s outstanding $450.0 million Senior Convertible Notes due 2025 at was $395.8 million. Fair Value of Convertible Note Hedge and Embedded Conversion Derivatives On June 1, 2020, the Company issued $450.0 million principal amount of 1.00% Senior Convertible Notes due 2023 (the “2023 Notes”). The 2023 Notes In connection with the issuance of the 2023 Notes, the Company entered into convertible note hedge transactions (the “2023 Hedge”) entitling the Company to purchase up to 5,345,010 shares of the Company’s common stock at an initial stock price of $84.19 per share, each of which is subject to adjustment. The 2023 Hedge will initially be settled in cash, or, if the Company has sufficient reserved shares with respect to the 2023 Notes, the 2023 Hedge may be settled in cash, stock, or a combination thereof. In accordance with authoritative guidance, the 2023 Hedge is accounted for as a derivative asset (“Convertible Note Hedge Derivative”), and is included in long-term assets in the Company’s Unaudited Consolidated Balance Sheet. The Embedded Conversion Derivative and Convertible Note Hedge Derivative are classified as Level 3 fair value measurements, as the derivative asset and liability are not traded in active markets and are valued using significant unobservable inputs. The following tables set forth the changes in the estimated fair value for the Company’s assets and liabilities measured using significant unobservable inputs (Level 3): ( in thousands June 30, 2020 Assets: Fair value measurement at January 1, 2020 $ — Derivative assets recorded in connection with the 2023 Hedge 69,525 Change in fair value measurement (24,589 ) Fair value measurement at June 30, 2020 $ 44,936 ( in thousands June 30, 2020 Liabilities: Fair value measurement at January 1, 2020 $ — Derivative liability recorded in connection with the 2023 Notes 57,224 Change in fair value measurement (12,288 ) Fair value measurement at June 30, 2020 $ 44,936 The Level 3 fair value measurements of the Convertible Note Hedge Derivative Derivative June 30, 2020: June 30, 2020 Valuation Technique Black Scholes Volatility 42% Expected term (years) 2.9 Risk free interest rate 0.2% Contingent Consideration Liabilities The fair value of contingent consideration liabilities assumed in business combinations is recorded as part of the purchase price consideration of the acquisition, and is determined using a discounted cash flow model or probability simulation model. The significant inputs of such models are not observable in the market, such as certain financial metric growth rates, volatility rates, projections associated with the applicable milestone, the interest rate, and the related probabilities and payment structure in the contingent consideration arrangement. Fair value adjustments to contingent consideration liabilities are recorded through operating expenses in the Unaudited The recurring Level 3 fair value measurements of contingent consideration liabilities associated with commercial sales milestones include the following significant unobservable inputs as of June 30, 2020 June 30, 2020 Valuation Technique Discounted cash flow Discount Rate Range 4.8% - 5.8% Weighted Average Discount Rate 5.3% Expected Years 2021 - 2024 Contingent consideration liabilities at June 30, 2020 and December 31, 2019 were $ 33.1 million and $ 42.6 million , respectively, and were recorded in the Unaudited Consolidated Balance Sheet commensurate with the respective payment terms. The following table sets forth the changes in the estimated fair value of the Company’s liabilities measured on a recurring basis using significant unobservable inputs (Level 3): Six Months Ended June 30, ( in thousands 2020 2019 Fair value measurement at January 1, 2020 $ 42,559 $ 50,410 Change in fair value measurement (1,521 ) 1,970 Contingent consideration paid or settled (7,938 ) (1,435 ) Changes resulting from foreign currency fluctuations — (59 ) Fair value measurement at June 30, 2020 $ 33,100 $ 50,886 Non-financial assets and liabilities measured on a nonrecurring basis Certain non-financial assets and liabilities are measured at fair value, usually with Level 3 inputs including the discounted cash flow method or cost method, on a nonrecurring basis in accordance with authoritative guidance. These include items such as non-financial assets and liabilities initially measured at fair value in a business combination and non-financial long-lived assets measured at fair value for an impairment assessment. In general, non-financial assets, including goodwill, right-of-use assets, intangible assets and property and equipment, are measured at fair value when there is an indication of impairment and are recorded at fair value only when any impairment is recognized. The carrying values of the Company’s financing lease obligations approximated their estimated fair value as of June 30, 2020 and December 31, 2019. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 4. Goodwill and Intangible Assets Goodwill and intangible assets consisted of the following: Weighted- Average Amortization ( in thousands, except years Period Gross Accumulated Intangible June 30, 2020: (in years) Amount Amortization Assets, net Intangible assets subject to amortization: Developed technology 8 $ 271,748 $ (179,371 ) $ 92,377 Manufacturing know-how and trade secrets 13 30,800 (21,490 ) 9,310 Trade name and trademarks 9 25,500 (18,446 ) 7,054 Customer relationships 9 153,525 (84,659 ) 68,866 Total intangible assets subject to amortization 9 $ 481,573 $ (303,966 ) $ 177,607 Intangible assets not subject to amortization: Goodwill $ 559,088 Total goodwill and intangible assets, net $ 736,695 Weighted- Average Amortization Period Gross Accumulated Intangible December 31, 2019: (in years) Amount Amortization Assets, net Intangible assets subject to amortization: Developed technology 8 $ 271,748 $ (163,459 ) $ 108,289 Manufacturing know-how and trade secrets 13 30,798 (20,333 ) 10,465 Trade name and trademarks 9 25,500 (16,947 ) 8,553 Customer relationships 9 150,744 (76,959 ) 73,785 Total intangible assets subject to amortization 9 $ 478,790 $ (277,698 ) $ 201,092 Intangible assets not subject to amortization: Goodwill $ 561,064 Total goodwill and intangible assets, net $ 762,156 The following table summarizes the changes in the carrying value of the Company’s goodwill: ( in thousands December 31, 2019 Gross goodwill $ 569,364 Accumulated impairment loss (8,300 ) 561,064 Changes to gross goodwill Changes resulting from foreign currency fluctuations (1,976 ) (1,976 ) June 30, 2020 Gross goodwill 567,388 Accumulated impairment loss (8,300 ) $ 559,088 Total expense related to the amortization of intangible assets, which is recorded in both cost of sales and operating expenses in the Unaudited Consolidated Statements of Operations depending on the functional nature of the intangible asset, was $13.5 million and $27.0 million for the three and six months ended June 30, 2020, respectively, and $13.2 million and $27.7 million for the three and six months ended June 30, 2019, respectively. Total future amortization expense related to intangible assets subject to amortization at June 30, 2020 is set forth in the table below: ( in thousands Remaining 2020 $ 26,519 2021 51,225 2022 42,670 2023 18,799 2024 13,030 Thereafter through 2031 25,364 Total future amortization expense $ 177,607 |
Business Combinations
Business Combinations | 6 Months Ended |
Jun. 30, 2020 | |
Business Combination Description [Abstract] | |
Business Combinations | 5. Business Combinations The Company recognizes the assets acquired, liabilities assumed, and any non-controlling interest at fair value at the date of acquisition. Certain acquisitions contained contingent consideration arrangements that required the Company to assess the acquisition date fair value of the contingent consideration liabilities, which was recorded as part of the purchase price allocation of the acquisition, with subsequent fair value adjustments to the contingent consideration recorded in the Unaudited Consolidated Statements of Operations. See Note 3 Variable Interest Entities The Company provides IOM services through various subsidiaries, which conduct business as NuVasive Clinical Services. In providing IOM services to surgeons and healthcare facilities across the United States, the Company maintains contractual relationships with several physician practices (“PCs”). In accordance with authoritative guidance, the Company has determined that the PCs are variable interest entities and therefore, the accompanying Unaudited Consolidated Financial Statements include the accounts of the PCs from the date of acquisition. During the periods presented, the results of the PCs were immaterial to the Company’s financial statements. The creditors of the PCs have claims only to the assets of the PCs, which are not material, and the assets of the PCs are not available to the Company . |
Indebtedness
Indebtedness | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Indebtedness | 6. Indebtedness The carrying values of the Company’s Senior Convertible Notes are as follows: ( in thousands June 30, 2020 December 31, 2019 2.25% Senior Convertible Notes due 2021: Principal amount $ 650,000 $ 650,000 Unamortized debt discount (13,344 ) (22,501 ) Unamortized debt issuance costs (2,514 ) (4,201 ) 634,142 623,298 1.00% Senior Convertible Notes due 2023: Principal amount 450,000 — Unamortized debt discount (55,761 ) — Unamortized debt issuance costs (13,512 ) — 380,727 — 0.375% Senior Convertible Notes due 2025: Principal amount 450,000 — Unamortized debt discount (73,549 ) — Unamortized debt issuance costs (10,459 ) — 365,992 — Total Senior Convertible Notes $ 1,380,861 $ 623,298 Less: Current portion (634,142 ) — Long-term Senior Convertible Notes $ 746,719 $ 623,298 2.25% Senior Convertible Notes due 2021 In March 2016, the Company issued $650.0 million principal amount of unsecured Senior Convertible Notes with a stated interest rate of 2.25% and a maturity date of March 15, 2021 (the “2021 Notes”). The net proceeds from the offering, after deducting initial purchasers' discounts and costs directly related to the offering, were approximately $634.1 million. The 2021 Notes may be settled in cash, stock, or a combination thereof, solely at the Company's discretion. It is the Company's current intent and policy to settle all conversions through combination settlement, which involves satisfying the principal amount outstanding with cash and any note conversion value over the principal amount in shares of the Company's common stock. The initial conversion rate of the 2021 Notes is 16.7158 shares per $1,000 principal amount, which is equivalent to a conversion price of approximately $59.82 per share, subject to adjustments. The Company uses the treasury share method for assumed conversion of the 2021 Notes to compute the weighted average shares of common stock outstanding for diluted earnings per share. The Company also entered into transactions for a convertible notes hedge (the “2021 Hedge”) and warrants (the “2021 Warrants”) concurrently with the issuance of the 2021 Notes. The cash conversion feature of the 2021 Notes required bifurcation from the notes and was initially accounted for as an equity instrument classified to stockholders’ equity, which resulted in recognizing $84.8 million in additional paid-in-capital during 2016. The interest expense recognized on the 2021 Notes during the three months ended June 30, 2020 June 30, 2020 Prior to September 15, 2020, holders may convert their 2021 Notes only under the following conditions: (a) during any calendar quarter beginning June 30, 2016, if the reported sale price of the Company's common stock for at least 20 days out of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than 130% of the conversion price on each applicable trading day; (b) during the five business day period in which the trading price of the 2021 Notes falls below 98% of the product of (i) the last reported sale price of the Company's common stock and (ii) the conversion rate on that date; and (c) upon the occurrence of specified corporate events, as defined in the 2021 Notes. From September 15, 2020 and until the close of business on the second scheduled trading day immediately preceding March 15, 2021, holders may convert their 2021 Notes at any time (regardless of the foregoing circumstances). Prior to March 20, 2019, the Company could not redeem the 2021 Notes. The Company may redeem the 2021 Notes, at its option, in whole or in part on or after March 20, 2019 until the close of business on the business day immediately preceding September 15, 2020 if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company delivers written notice of a redemption. The redemption price will be equal to 100% of the principal amount of such 2021 Notes to be redeemed plus accrued and unpaid interest to, but excluding, the redemption date June 30, 2020 2021 Hedge In connection with the offering of the 2021 Notes, the Company entered into the hedge transaction with the initial purchasers of the 2021 Notes and/or their affiliates (the “2021 Counterparties”) entitling the Company to purchase up to 10,865,270 shares of the Company's common stock at an initial stock price of $59.82 per share, each of which is subject to adjustment. The cost of the 2021 Hedge was $111.2 million and accounted for as an equity instrument by recognizing $111.2 million in additional paid-in-capital during 2016. The 2021 Hedge will expire on March 15, 2021. The 2021 Hedge is expected to reduce the potential equity dilution upon conversion of the 2021 Notes if the daily volume-weighted average price per share of the Company's common stock exceeds the strike price of the 2021 Hedge. An assumed exercise of the 2021 Hedge by the Company is considered anti-dilutive since the effect of the inclusion would always be anti-dilutive with respect to the calculation of diluted earnings per share. 2021 Warrants The Company sold warrants to the 2021 Counterparties to acquire up to 10,865,270 shares of the Company’s common stock. The 2021 Warrants will expire on various dates from June 2021 through December 2021 and may be settled in cash or net shares. It is the Company's current intent and policy to settle all conversions in shares of the Company’s common stock. The Company received $44.9 million in cash proceeds from the sale of the 2021 Warrants, which was recorded in additional paid-in-capital. The 2021 Warrants could have a dilutive effect on the Company's earnings per share to the extent that the price of the Company's common stock during a given measurement period exceeds the strike price of the 2021 Warrants, which is $80.00 per share. The Company uses the treasury share method for assumed conversion of its 2021 Warrants to compute the weighted average common shares outstanding for diluted earnings per share. 1.00 % S enior Convertible Notes due 2023 In June 2020, the Company issued $450.0 million principal amount of unsecured Senior Convertible Notes with a stated interest rate of 1.00% and a maturity date of June 1, 2023. The net proceeds from the offering, after deducting initial purchasers’ discounts and costs directly related to the offering, were approximately $436.2 million. The 2023 Notes will initially be settled in cash, or, if the Company has sufficient reserved shares, the Company may settle conversions in cash, stock, or a combination thereof, solely at the Company’s discretion. As of June 30, 2020, the Company did not have sufficient reserved shares with respect to the 2023 Notes. To the extent the Company in the future has sufficient reserved shares, it is the Company’s current intent and policy to settle all conversions through combination settlement, which involves satisfying the principal amount outstanding with cash and any note conversion value over the principal amount in shares of the Company’s common stock. In addition, following certain corporate events that occur prior to the maturity date, the Company will increase the conversion rate for a holder who elects to convert its 2023 Notes in connection with such a corporate event in certain circumstances. As discussed in Note 3, the Embedded Conversion Derivative requires bifurcation from the 2023 Notes and is accounted for as a liability, which is included in long-term liabilities in the Company’s Unaudited Consolidated Balance Sheet. The fair value of the 2023 Notes Embedded Conversion Derivative at the time of issuance of the 2023 Notes was $ 57.2 The interest expense recognized on the 2023 Notes during both the three and six months ended June 30, 2020 Prior to February 1, 2023, holders may convert their 2023 Notes only under the following conditions: (a) during any calendar quarter commencing after the calendar quarter ending on September 30, 2020 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (b) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price of the 2023 Notes per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on such trading day; or (c) upon the occurrence of specified corporate events, as defined in the 2023 Notes. On or after February 1, 2023, until the close of business on the second scheduled trading day immediately preceding June 1, 2023, holders may convert their 2023 Notes at any time, regardless of the foregoing conditions. The Company may not redeem the 2023 Notes prior to the maturity date and no principal payments are due on the 2023 Notes prior to maturity. Other than restrictions relating to certain fundamental changes and consolidations, mergers or asset sales and customary anti-dilution adjustments, the 2023 Notes do not contain any financial covenants and do not restrict the Company from conducting significant restructuring transactions, paying dividends or issuing or repurchasing any of its other securities. As of June 30, 2020, the Company is unaware of any current events or market conditions that would allow holders to convert the 2023 Notes. 2023 Hedge In connection with the sale of the 2023 Notes, the Company entered into privately negotiated call option transactions with certain dealers, which included affiliates of certain of the initial purchasers of the 2023 Notes and other financial institutions (the “2023 Counterparties”), entitling the Company to purchase up to 5,345,010 shares of the Company’s common stock at an initial stock price of $84.19 per share, each of which is subject to adjustment. The 2023 Hedge will initially be settled in cash, or, if the Company has sufficient reserved shares with respect to the 2023 Notes, the 2023 Hedge may be settled in cash, stock, or a combination thereof. As discussed in Note 3, t he 2023 Hedge is accounted for as a derivative asset as of June 30, 2020, and the Convertible Note Hedge Derivative is included in long-term assets in the Company’s . The cost of the 2023 Hedge was $69.5 million. The 2023 Hedge will expire on the second scheduled trading day immediately preceding June 1, 2023. The 2023 Hedge is expected to reduce the potential equity dilution upon conversion of the 2023 Notes if the daily volume-weighted average price per share of the Company’s common stock exceeds the strike price of the 2023 Hedge. 2023 Warrants The Company sold warrants to the 2023 Counterparties to acquire up to 3,093,500 shares of the Company’s common stock. The 2023 Warrants will expire on various dates from September 2023 through November 2023 and may be settled in net shares or cash, subject to certain conditions. I t is the Company’s current intent and policy to settle all conversions in shares of the Company’s common stock. 0.375% Senior Convertible Notes due 2025 In March 2020, the Company issued $450.0 million principal amount of unsecured Senior Convertible Notes with a stated interest rate of 0.375% and a maturity date of March 15, 2025 (the “2025 Notes”). The net proceeds from the offering, after deducting initial purchasers’ discounts and costs directly related to the offering, were approximately $437.0 million. The 2025 Notes may be settled in cash, stock, or a combination thereof, solely at the Company’s discretion. It is the Company's current intent and policy to settle all conversions through combination settlement, which involves satisfying the principal amount outstanding with cash and any note conversion value over the principal amount in shares of the Company’s common stock. The initial conversion rate of the 2025 Notes is 10.7198 In addition, following certain corporate events that occur prior to the maturity date or if the Company issues a notice of redemption, the Company will increase the conversion rate for a holder who elects to convert its 2025 Notes in connection with such a corporate event or in connection with such redemption in certain circumstances. The cash conversion feature of the 2025 Notes required bifurcation from the notes and was initially accounted for as an equity instrument classified to stockholders’ equity, which resulted in recognizing $78.3 million in additional paid-in-capital during the six months ended June 30, 2020 The interest expense recognized on the 2025 Notes during the three months ended June 30, 2020 June 30, 2020 Prior to September 15, 2024, holders may convert their 2025 Notes only under the following conditions: (a) during any calendar quarter commencing after the calendar quarter ending on June 30, 2020 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (b) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price of the 2025 Notes per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on such trading day; (c) if the Company calls any or all of the 2025 Notes for redemption, at any time prior to the close of business on the second scheduled trading day preceding the redemption date; or (d) upon the occurrence of specified corporate events, as defined in the 2025 Notes. On or after September 15, 2024, until the close of business on the second scheduled trading day immediately preceding March 15, 2025, holders may convert their 2025 Notes at any time, regardless of the foregoing conditions. The Company may not redeem the 2025 Notes prior to March 20, 2023. The Company may redeem the 2025 Notes, at its option, in whole or in part, on or after March 20, 2023 until the close of business on the business day immediately preceding September 15, 2024, if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company delivers written notice of a redemption. The redemption price will be equal to 100% of the principal amount of such 2025 Notes to be redeemed plus accrued and unpaid interest to, but excluding, the redemption date June 30, 2020 2025 Hedge In connection with the sale of the 2025 Notes, the Company entered into privately negotiated call option transactions with certain dealers, which included affiliates of certain of the initial purchasers of the 2025 Notes and other financial institutions (the “2025 Counterparties”), entitling the Company to purchase up to 4,823,910 shares of the Company’s common stock at an initial stock price of $93.29 per share, each of which is subject to adjustment. The cost of the 2025 Hedge was $78.3 million and accounted for as an equity instrument by recognizing $78.3 million in additional paid-in-capital during the six months ended June 30, 2020 2025 Warrants The Company sold warrants to the 2025 Counterparties to acquire up to 4,823,910 shares of the Company’s common stock. The 2025 Warrants will expire on various dates from June 2025 through October 2025 and may be settled in net shares or cash, subject to certain conditions. It is the Company’s current intent and policy to settle all conversions in shares of the Company’s common stock. The Company received $47.1 million in cash proceeds from the sale of the 2025 Warrants, which was recorded in additional paid-in-capital. The 2025 Warrants could have a dilutive effect on the Company’s earnings per share to the extent that the price of the Company's common stock during a given measurement period exceeds the strike price of the 2025 Warrants, which is $127.84 per share. The Company uses the treasury share method for assumed conversion of its 2025 Warrants to compute the weighted average common shares outstanding for diluted earnings per share. Revolving Senior Credit Facility In February 2020, the Company entered into a Second Amended and Restated Credit Agreement (the “2020 Credit Agreement”) for a revolving senior credit facility (the “2020 Facility”), which replaced the previous Amended and Restated Credit Agreement the Company had entered into in April 2017. The 2020 Credit Agreement was further amended in May 2020 to, among other things, provide additional flexibility in determining the financial covenant leverage ratios for the second and third fiscal quarters of 2020 and to adjust certain margin and benchmark rates used to determine interest under the 2020 Facility. The 2020 Credit Agreement provides for secured revolving loans, multicurrency loan options and letters of credit in an aggregate amount of up to $550.0 million. The 2020 Credit Agreement also contains an expansion feature, which allows the Company to increase the aggregate principal amount of the 2020 Facility provided the Company remains in compliance with the underlying financial covenants on a pro forma basis, including but not limited to, compliance with the consolidated interest coverage ratio and certain consolidated leverage ratios. The 2020 Facility matures in February 2025 (subject to an earlier springing maturity date), and includes a sublimit of $50.0 million for standby letters of credit, a sublimit of $250.0 million for multicurrency borrowings, and a sublimit of $5.0 million for swingline loans. All assets of the Company and its material domestic subsidiaries continue to be pledged as collateral under the 2020 Facility (subject to customary exceptions) pursuant to the terms set forth in the Second Amended and Restated Security and Pledge Agreement executed in favor of the administrative agent by the Company. Each of the Company’s material domestic subsidiaries guarantee the 2020 Facility. In connection with the 2020 Facility, the Company incurred issuance costs which will be amortized over the term of the 2020 Facility. June 30, 2020 Any borrowings under the 2020 Facility are intended to be used by the Company to provide financing for working capital and other general corporate purposes, including potential mergers and acquisitions and to refinance indebtedness. The 2020 Credit Agreement contains affirmative, negative, permitted acquisition and financial covenants, and events of default customary for financings of this type. The financial covenants require the Company to maintain a consolidated interest coverage ratio and certain consolidated leverage ratios, which are measured on a quarterly basis. |
Shareholders_ Equity
Shareholders’ Equity | 6 Months Ended |
Jun. 30, 2020 | |
Stockholders Equity Note [Abstract] | |
Shareholders’ Equity | 7. Shareholders’ Equity In October 2017, the Company announced that the Board of Directors approved a share repurchase program authorizing the repurchase of up to $100 million of the Company’s common stock over a three-year |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | 8. Stock-Based Compensation The compensation cost that has been included in the Unaudited Consolidated Statements of Operations for the Company’s stock-based compensation plans was as follows: Three Months Ended June 30, Six Months Ended June 30, ( in thousands 2020 2019 2020 2019 Selling, general and administrative expense (benefit) $ 3,546 $ 5,911 $ (615 ) $ 10,690 Research and development expense 1,432 752 2,755 1,652 Cost of sales 115 238 95 276 Stock-based compensation expense before taxes 5,093 6,901 2,235 12,618 Related income tax expense (benefit) 587 (1,725 ) 258 (3,155 ) Stock-based compensation expense, net of taxes $ 5,680 $ 5,176 $ 2,493 $ 9,463 At June 30, 2020, there was $49.8 million of unamortized compensation expense for restricted stock units (“RSUs”) and performance-based restricted stock units (“PRSUs”) to be recognized over a weighted average period of 2.4 years Restricted Stock Units and Performance-Based Restricted Stock Units The Company issued approximately 13,000 and 177,000 shares of common stock, before net share settlement, upon vesting of RSUs and PRSUs during the three and six months ended June 30, 2020, respectively, and issued approximately 642,000 shares of common stock, before net share settlement, upon vesting of RSUs and PRSUs during the year ended December 31, 2019. Stock Options and Purchase Rights The weighted average assumptions used to estimate the fair value of stock purchase rights under the employee stock purchase plan (“ESPP”) are as follows: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 ESPP Volatility 66 % 37 % 47 % 37 % Expected term (years) 0.5 0.5 0.5 0.5 Risk free interest rate 0.4 % 2.4 % 1.0 % 2.5 % Expected dividend yield — % — % — % — % Under the terms of the ESPP, the Company’s employees (referred to as “shareowners”) can elect to have up to 15% of their annual compensation, up to a maximum of $21,250 per year, withheld to purchase shares of the Company’s common stock for a purchase price equal to 85% of the lower of the fair market value per share (at closing) of the Company’s common stock on (i) the commencement date of the six-month The Company has not granted any options since 2011. The Company issued approximately 3,000 shares of common stock, before net share settlement, upon the exercise of outstanding stock options during both the three and six months ended June 30, 2020, and issued approximately 33,000 shares of common stock, before net share settlement, upon the exercise of outstanding stock options during the year ended December 31, 2019. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. Income Taxes Income taxes are determined using an estimated annual effective tax rate applied against income, and then adjusted for the tax impacts of certain significant and discrete items. For the six months ended June 30, 2020, the Company treated the tax impact of the following as discrete events for which the tax effect was recognized separately from the application of the annual effective tax rate: losses in jurisdictions where no tax benefit is anticipated, adjustments to prior year uncertain tax positions, net shortfalls on share-based payments and return to provision adjustments. The Company’s effective tax rate recorded for the six months ended June 30, 2020 was 19%. In accordance with the disclosure requirements as described in ASC Topic 740, Income Taxes, the Company has classified unrecognized tax benefits as non-current income tax liabilities, or a reduction in deferred tax assets, unless expected to be paid within one year. The Company’s continuing practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had an increase in gross unrecognized tax benefits of approximately $3.5 million during the six months ended June 30, 2020, primarily related to research and development credits and foreign withholding taxes. The Company believes it is reasonably possible that approximately $5.8 million of its remaining unrecognized tax positions may be recognized within the next twelve months due to potential tax settlements and as certain statute of limitations expire, the amount of which is primarily attributable to tax positions involving the valuation of intercompany transactions. The Company is subject to routine compliance reviews on various tax matters around the world in the ordinary course of business. Currently, the only active audit is with the U.S. Internal Revenue Service for 2014 – 2016 tax years. California income tax returns are subject to examination in all years due to prior year net operating losses and research and development credits. Income tax returns of other major state and foreign jurisdictions remain subject to examination from 2015 and 2012 forward, respectively. |
Business Segment, Product, and
Business Segment, Product, and Geographic Information | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Business Segment, Product and Geographic Information | 10. Business Segment, Product and Geographic Information The Company operates in one segment based upon the Company’s organizational structure, the way in which the operations and investments are managed and evaluated by the chief operating decision maker (“CODM”) as well as the lack of availability of discrete financial information at a lower level. The Company’s CODM reviews net sales at the product line offering level, and manufacturing, operating income and expenses, and net income at the Company wide level to allocate resources and assess the Company’s overall performance. The Company shares common, centralized support functions, including finance, human resources, legal, information technology, and corporate marketing, all of which report directly to the CODM. Accordingly, decision-making regarding the Company’s overall operating performance and allocation of Company resources is assessed on a consolidated basis. As such, the Company operates as one reporting segment. The Company has disclosed the net sales for each of its product line offerings to provide the reader of the financial statements transparency into the operations of the Company. The Company reports under two distinct product lines; spinal hardware and surgical support. The Company’s spinal hardware product line offerings include implants and fixation products. The Company’s surgical support product offerings include IOM services, disposables and biologics, and our capital equipment, all of which are used to aid spinal surgery. Net sales by product line was as follows: Three Months Ended June 30, Six Months Ended June 30, ( in thousands 2020 2019 2020 2019 Spinal hardware $ 152,818 $ 212,634 $ 343,687 $ 409,772 Surgical support 50,794 79,471 119,806 157,109 Total net sales $ 203,612 $ 292,105 $ 463,493 $ 566,881 Net sales and property and equipment, net, by geographic area were as follows: Net Sales Property and Equipment, Net Three Months Ended June 30, Six Months Ended June 30, June 30, December 31, ( in thousands 2020 2019 2020 2019 2020 2019 United States $ 161,457 $ 236,128 $ 365,489 $ 458,941 $ 228,882 $ 218,771 International (excludes Puerto Rico) 42,155 55,977 98,004 107,940 50,280 47,547 Total $ 203,612 $ 292,105 $ 463,493 $ 566,881 $ 279,162 $ 266,318 |
Commitments
Commitments | 6 Months Ended |
Jun. 30, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments | 11. Commitments Leases At the inception of a contractual arrangement, the Company determines whether the contract contains a lease by assessing whether there is an identified asset and whether the contract conveys the right to control the use of the identified asset in exchange for consideration over a period of time. If both criteria are met, the Company records the associated lease liability and corresponding right-of-use asset upon commencement of the lease using a discount rate based on a credit-adjusted secured borrowing rate commensurate with the term of the lease. The Company records lease liabilities within current liabilities or long-term liabilities based upon the length of time associated with the lease payments. The Company records its operating lease right-of-use assets as long-term assets. Right-of-use assets for financing leases are recorded within property and equipment, net in the Unaudited Consolidated Balance Sheet. Leases with an initial term of 12 months or less are not recorded on the Unaudited Consolidated Balance Sheet. The Company recognizes lease expense on a straight-line basis over the lease term. In connection with certain operating leases, the Company has security deposits recorded and maintained as restricted cash totaling $1.5 million as of June 30, 2020 and December 31, 2019. The Company leases office and storage facilities and equipment under various operating and financing lease agreements. The initial terms of these leases range from 1 to 17 years and generally provide for periodic rent increases, and renewal and termination options. The Company’s lease agreements do not contain any material variable lease payments, residual value guarantees or material restrictive covenants. Certain leases require the Company to pay taxes, insurance, and maintenance. Payments for the transfer of goods or services such as common area maintenance and utilities represent non-lease components. The Company elected the package of practical expedients and therefore does not separate non-lease components from lease components. In the first quarter of 2020, the lease commenced with respect to the remaining build-out portion of the Company’s corporate headquarters in San Diego, California, which totals approximately $58.8 million in lease payments over a 15-year term. The table below summarizes the Company’s right-of-use assets and lease liabilities as of June 30, 2020 and December 31, 2019 (in thousands) June 30, 2020 December 31, 2019 Assets Operating $ 105,863 $ 66,932 Financing 2,552 1,453 Total leased assets $ 108,415 $ 68,385 Liabilities Current: Operating $ 7,502 $ 5,567 Financing 1,231 672 Long-term: Operating 114,881 73,153 Financing 1,462 905 Total lease liabilities $ 125,076 $ 80,297 Supplemental non-cash information: Weighted-average remaining lease term (years) - operating leases 13.2 12.4 Weighted-average remaining lease term (years) - finance leases 2.1 2.3 Weighted-average discount rate - operating leases 5.5 % 7.3 % Weighted-average discount rate - finance leases 5.1 % 5.4 % The table below summarizes the Company’s lease costs, cash payments, and operating lease liabilities arising from obtaining right-of-use assets under its operating and financing lease obligations were as follows Three Months Ended June 30, Six Months Ended June 30, (in thousands, except years and rates) 2020 2019 2020 2019 Lease expense: Operating lease expense $ 3,953 $ 2,964 $ 7,460 $ 5,786 Finance lease expense: Depreciation of right-of-use assets 305 99 563 197 Interest expense on lease liabilities 31 12 59 26 Total lease expense $ 4,289 $ 3,075 $ 8,082 $ 6,009 Consolidated Statements of Cash Flows information: Operating cash flows used for operating leases $ 3,700 $ 3,153 $ 6,996 $ 6,172 Operating cash flows used for financing leases 31 12 59 26 Financing cash flows used for financing leases 295 93 542 185 Total cash paid for amounts included in the measurement of lease liabilities $ 4,026 $ 3,258 $ 7,597 $ 6,383 Supplemental non-cash information: Operating lease liabilities arising from obtaining right-of-use assets $ 543 $ 2,496 $ 39,805 $ 77,605 The Company’s future minimum annual lease payments under operating and financing leases at June 30, 2020 are as follows: Financing Operating (in thousands) Leases Leases Remaining 2020 $ 662 $ 6,974 2021 1,226 13,798 2022 864 13,332 2023 74 12,991 2024 9 11,995 Thereafter — 116,884 Total minimum lease payments $ 2,835 $ 175,974 Less: amount representing interest (142 ) (53,591 ) Present value of obligations under leases 2,693 122,383 Less: current portion (1,231 ) (7,502 ) Long-term lease obligations $ 1,462 $ 114,881 Executive Severance Plans The Company has employment contracts with key executives and maintains severance plans that provide for the payment of severance and other benefits if such executives are terminated for reasons other than cause, as defined in those agreements and plans. Certain agreements call for payments that are based on historical compensation, and accordingly, the amount of the contractual commitment will change over time commensurate with the executive’s applicable earnings. At June 30, 2020, future commitments for such key executives were approximately $16.8 million. In certain circumstances, the agreements call for the acceleration of equity vesting. Those figures are not reflected in the above information. |
Contingencies
Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Contingencies [Abstract] | |
Contingencies | 12. Contingencies The Company is subject to potential liabilities under government regulations and various claims and legal actions that are pending or may be asserted from time-to-time. These matters arise in the ordinary course and conduct of the Company’s business and include, for example, commercial, intellectual property, environmental, securities and employment matters. The Company intends to continue to defend itself vigorously in such matters and when warranted, take legal action against others. Furthermore, the Company regularly assesses contingencies to determine the degree of probability and range of possible loss for potential accrual in its financial statements. An estimated loss contingency is accrued in the Company’s financial statements if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Based on the Company’s assessment, it has adequately accrued an amount for contingent liabilities currently in existence. The Company does not accrue amounts for liabilities that it does not believe are probable. Litigation is inherently unpredictable, and unfavorable resolutions could occur. As a result, assessing contingencies is highly subjective and requires judgment about future events. The amount of ultimate loss may exceed the Company’s current accruals, and it is possible that its cash flows or results of operations could be materially affected in any particular period by the unfavorable resolution of one or more of these contingencies. |
Regulatory Matters
Regulatory Matters | 6 Months Ended |
Jun. 30, 2020 | |
Regulatory Matter [Abstract] | |
Regulatory Matters | 13. Regulatory Matters On August 31, 2015, the Company received a civil investigative demand (“CID”) issued by the Department of Justice (“DOJ”) pursuant to the federal False Claims Act. The CID requires the delivery of a wide range of documents and information related to an investigation by the DOJ concerning allegations that the Company assisted a physician group customer in submitting improper claims for reimbursement and made improper payments to the physician group in violation of the Anti-Kickback Statute. The Company is cooperating with the DOJ in regards to this matter. No assurance can be given as to the timing or outcome of this investigation. As of June 30, 2020, the probable outcome of this matter cannot be determined, nor can the Company estimate a range of potential loss. In accordance with authoritative guidance on the evaluation of loss contingencies, the Company has not recorded an accrual related to this matter. |
Description of Business and B_2
Description of Business and Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Description of Business | Description of Business NuVasive, Inc. (the “Company” or “NuVasive”) was incorporated in Delaware on July 21, 1997, and began commercializing its products in 2001. The Company’s principal product offering includes a minimally disruptive surgical platform called Maximum Access Surgery, or MAS. The MAS platform combines three categories of solutions that collectively minimize soft tissue disruption during spine fusion surgery, provide maximum visualization and are designed to enable safe and reproducible outcomes for the surgeon and the patient. The platform includes the Company’s proprietary software-driven nerve detection and avoidance systems and Intraoperative Monitoring (“IOM”) services and support; MaXcess, an integrated split-blade retractor system; and a wide variety of specialized implants and biologics. To assist with surgical procedures, the Company offers a technology platform called Integrated Global Alignment (“iGA”), in which products and computer assisted technology under the MAS platform help achieve more precise spinal alignment. The individual components of the MAS platform, and many of the Company’s products, can also be used in open or traditional spine surgery. The Company continues to focus research and development efforts to expand its MAS product platform and advance the applications of its unique technology into procedurally integrated surgical solutions. The Company dedicates significant resources toward training spine surgeons on its unique technology and products. The Company’s procedurally integrated solutions use innovative, technological advancements and the MAS platform to provide surgical efficiency, operative reliability, and procedural versatility. The Company offers a range of implants for spinal surgery, which include its porous titanium and polyetheretherketone (“PEEK”) implants under its Advanced Materials Science portfolio, fixation products such as customizable rods, plates and screws, bone allograft in patented saline packaging, allogeneic and synthetic biologics, and disposables used in IOM. The Company makes available MAS instrument sets, MaXcess and neuromonitoring systems to hospitals to facilitate surgeon access to the spine to perform restorative and fusion procedures using the Company’s implants and fixation products. The Company sells MAS instrument sets, MaXcess and neuromonitoring systems to hospitals, however, such sales are immaterial to the Company’s results of operations. The Company also designs and sells expandable growing rod implant systems that can be non-invasively lengthened following implantation with precise, incremental adjustments via an external remote controller using magnetic technology called MAGnetic External Control, or MAGEC, which allows for the minimally invasive treatment of early-onset and adolescent scoliosis. This technology is also the basis for the Company’s Precice limb lengthening system, which allows for the correction of long bone limb length discrepancy, as well as enhanced bone healing in patients that have experienced traumatic injury. The Company has developed a procedural solution for spine surgery that includes IOM services, iGA and hardware and software technology offerings. The Company has also invested in the development of capital equipment designed to further improve clinical and economic outcomes through proceduralization, including LessRay and Pulse. LessRay is an image enhancement platform designed to reduce radiation exposure in the operating room by allowing surgeons to take low-quality, low-dose images and improve them to look like conventional full-dose images. Pulse In December 2019, a novel strain of coronavirus, which causes COVID-19, was identified. Due to the rapid and global spread of the virus, on March 11, 2020, the World Health Organization declared the COVID-19 outbreak a pandemic. To slow the proliferation of COVID-19, governments domestically and around the world have implemented extraordinary measures, which include the mandatory closure of businesses, restrictions on travel and gatherings, and quarantine and physical distancing requirements. In addition, many government agencies in conjunction with hospitals and healthcare systems have, to varying degrees, deferred or suspended elective surgical procedures. While certain spine surgeries are deemed essential and certain surgeries, like in cases of trauma, cannot be delayed, the Company has seen and may continue to see a significant reduction in procedural volumes as hospital systems and/or patients elect to defer spine surgery procedures. As a result of these measures, the Company has experienced substantial reductions in procedural volumes and anticipates this trend will continue during the pandemic. Although the Company cannot predict the specific extent, duration, or scope of the impact that the COVID-19 pandemic will have on its financial results, the Company has experienced, and may continue to experience, material declines in its net sales, cash flow, and/or profitability in one or more quarterly periods in 2020 compared to the corresponding prior-year periods and compared to its expectations at the beginning of the 2020 fiscal year. |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying Unaudited Consolidated Financial Statements include the accounts of the Company and its majority-owned or controlled subsidiaries, collectively referred to as either NuVasive or the Company. The Company translates the financial statements of its foreign subsidiaries using end-of-period exchange rates for assets and liabilities and average exchange rates during each reporting period for results of operations. When there is a portion of equity in an acquired subsidiary not attributable, directly or indirectly, to the respective parent entity, the Company records the fair value of the non-controlling interest at the acquisition date and classifies the amounts attributable to non-controlling interest separately in equity in the Company's Consolidated Financial Statements. Any subsequent changes in a parent's ownership interest while the parent retains its controlling financial interest in its subsidiary are accounted for as equity transactions. All significant intercompany balances and transactions have been eliminated in consolidation. The Company has replaced the caption “Revenue” with “Net sales,” and the caption “Sales, marketing and administrative” with “Selling, general and administrative,” within the Unaudited Consolidated Statements of Operations and corresponding changes have been made throughout this Quarterly Report to conform to this presentation. These updated captions have no impact on previously reported results of operations or financial position. The accompanying Unaudited Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Pursuant to these rules and regulations, the Company has condensed or omitted certain information and footnote disclosures it normally includes in its annual Consolidated Financial Statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). Operating results for the three and six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for any other interim period or for the full year. These Unaudited Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto for the year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K filed with the SEC. In the opinion of management, the Unaudited Consolidated Financial Statements and notes thereto include all adjustments that are of a normal and recurring nature that are necessary for the fair presentation of the Company’s financial position and of the results of operations and cash flows for the periods presented. |
Use of Estimates | Use of Estimates To prepare financial statements in conformity with GAAP, management must make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. |
Recently Accounting Pronouncements Not Yet Adopted And Recently Adopted Accounting Standards | Recent Accounting Pronouncements Not Yet Adopted In January 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the Emerging Issues Task Force) Recently Adopted Accounting Standards In June 2016, the FASB issued Accounting Standards Update No. 2016-13, Financial Instruments – Credit Losses (“ASU 2016-13”), which changes the accounting for recognizing impairments of financial assets. Under the new guidance, credit losses for certain types of financial instruments will be estimated based on expected losses. The new guidance also modifies the impairment models for available-for-sale debt securities and for purchased financial assets with credit deterioration since their origination. no In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles – Goodwill and Other In August 2018, the FASB issued Accounting Standards Update No. 2018-13, Fair Value Measurement: Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which adds and modifies certain disclosure requirements for fair value measurements. Under the new guidance, entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, or valuation processes for Level 3 fair value measurements. However, public companies will be required to disclose the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and related changes in unrealized gains and losses included in other comprehensive income. The Company adopted ASU 2018-13 as of January 1, 2020. The adoption did not have a material impact on the Company’s Unaudited Consolidated Financial Statements. See Note 3 to the Unaudited Consolidated Financial Statements for further discussion on fair value measurements. In September 2018, the FASB issued Accounting Standards Update No. 2018-15, Intangible – Goodwill and Other – Internal-Use Software In March 2020, the FASB issued Accounting Standards Update No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting provides temporary optional expedients and exceptions to the guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates. The relief is temporary and generally cannot be applied to contract modifications that occur after December 31, 2022 or hedging relationships entered into or evaluated after that date. In December 2019, the FASB issued Accounting Standards Update No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which modifies Accounting Standard Codification 740 – Income Taxes (“ASC 740”), to simplify the accounting for income taxes. ASU 2019-12 enhances and simplifies various aspects of the income tax accounting guidance in ASC 740. This update is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years, and early adoption is permitted. The Company elected to early adopt ASU 2019-12 in the quarter ended June 30, 2020. The Company applied the updated guidance for year-to-date losses in the Company’s interim period tax accounting on a prospective basis. The early adoption had no impact on the expected full year tax expense for 2020, and increased the recognition of approximately $2.9 million of tax benefit into the quarter ended June 30, 2020 that would otherwise have been limited under ASC 740. |
Revenue Recognition | Revenue Recognition In accordance with Accounting Standards Codification 606 Revenue from Contracts with Customers (“ASC 606”), the Company recognizes revenue upon the transfer of goods or services to a customer at an amount that reflects the expected consideration to be received in exchange for those goods or services. The principles in ASC 606 are applied using the following five steps: (i) identify the contract with a customer; (ii) identify the performance obligation(s) in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation(s) in the contract; and (v) recognize revenue when (or as) the Company satisfies its performance obligation(s). Specifically, revenue from the sale of implants, fixation products and disposables is generally recognized at an amount that reflects the expected consideration upon notice that the Company’s products have been used in a surgical procedure or upon shipment to a third-party customer assuming control of the products. Revenue from IOM services is recognized in the period the service is performed for the amount of consideration expected to be received. Revenue from the sale of surgical instrument sets is generally recognized upon receipt of a purchase order and the subsequent shipment to a customer who assumes control. In certain cases, the Company does offer the ability for customers to lease surgical instrumentation primarily on a non-sales type basis. Revenue from the sale or lease of capital equipment is generally recognized following the execution of a contract and upon the installation of the equipment and the acceptance by the customer. Selling and leasing of surgical instrument sets and capital equipment represents an immaterial amount of the Company’s total net sales in all periods presented. Revenue associated with products holding rights of return or trade-in are recognized when the Company concludes there is not a risk of significant revenue reversal in future periods for the expected consideration in the transaction. Costs incurred by the Company associated with sales contracts with customers are deferred over the performance obligation period and recognized in the same period as the related revenue, with the exception of contracts that complete within one year or less, in which case the associated costs are expensed as incurred. |
Allowance for Credit Losses | Allowance for Credit Losses The Company maintains an allowance for credit losses resulting from the inability of its customers, including hospitals, ambulatory surgery centers, and distributors, Historically, the Company’s reserves have been adequate to cover credit losses. The Company's exposure to credit losses may increase if its customers are adversely affected by changes in healthcare laws, coverage and reimbursement, economic pressures or uncertainty associated with local or global economic recessions, disruption associated with the current COVID-19 pandemic, or other customer-specific factors. It is possible that there could be a material adverse impact from potential adjustments of the carrying amount of trade receivables as customers’ cash flows are impacted by their response to the COVID-19 pandemic and the deferral of elective surgical procedures. In accordance with ASU 2016-13, the Company no longer evaluates whether its available-for-sale debt securities in an unrealized loss position are other-than-temporarily impaired. Instead, the Company assesses whether such unrealized loss positions are credit-related. The credit-related portion of unrealized losses, and any subsequent improvements, are recorded in interest income in the Unaudited Consolidated Statement of Operations through an allowance for credit losses. Unrealized gains and losses that are not credit-related are included in accumulated other comprehensive (loss) income. The following table summarizes the changes in the allowance for credit losses: (in thousands) June 30, 2020 Allowance for credit losses at January 1, 2020 $ 9,423 Current-period provision for expected losses 1,441 Write-offs charged against the allowance (406 ) Recoveries of amounts previously written off 48 Changes resulting from foreign currency fluctuations (80 ) Allowance for credit losses at end of period $ 10,426 |
Inventory, Net | Inventory, Net Net inventory as of June 30, 2020 Finished goods primarily consists of specialized implants, fixation products and disposables and are stated at the lower of cost or net realizable value determined by utilizing a standard cost method, which includes capitalized variances, which approximates the weighted average cost. Work in progress and raw materials represent the underlying material, and labor for work in progress, that ultimately yield finished goods upon completion and are subject to lower of cost or net realizable value. The Company reviews the components of its inventory on a periodic basis for excess and obsolescence and adjusts inventory to its net realizable value as necessary. The Company provides an inventory reserve for estimated excess and obsolete inventory based upon historical turnover and assumptions about future demand for its products and market conditions. The Company’s allograft products have shelf lives ranging from two to five years and are subject to demand fluctuations based on the availability and demand for alternative products. The Company’s inventory, which consists primarily of disposables, specialized implants and fixation products, is at risk of obsolescence following the introduction and development of new or enhanced products. A stated goal of the Company is to focus on continual product innovation and to obsolete its own products, which increases the risk that products will become obsolete prior to the end of their anticipated useful life. The Company’s estimates and assumptions for excess and obsolete inventory are reviewed and updated on a quarterly basis. The estimates the Company uses for demand are also used for near-term capacity planning and inventory purchasing and are consistent with its revenue forecasts. Increases in the reserve for excess and obsolete inventory result in a corresponding charge to cost of sales. For the three months ended June 30, 2020 and 2019, the Company recorded a reserve for excess and obsolete inventory of $25.2 million and $3.3 million, respectively. For the six months ended June 30, 2020 and 2019, the Company recorded a reserve for excess and obsolete inventory of $30.5 million and $6.4 million, respectively. The increase is primarily attributable to updates to the Company’s estimates and assumptions about future demand for certain spinal hardware products associated with market conditions affected by the COVID-19 pandemic. |
Derivative Financial Instruments | Derivative Financial Instruments The Company recognizes all derivative instruments as assets or liabilities in its Unaudited Consolidated Balance Sheets |
Comprehensive Income | Comprehensive Income Comprehensive income is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources. Comprehensive income includes net of tax, unrealized gains or losses on the Company’s marketable securities and foreign currency translation adjustments. The cumulative translation adjustments included in accumulated other comprehensive loss were $12.2 million and $9.4 million at June 30, 2020 and December 31, 2019, respectively. |
Product Shipment Costs | Product Shipment Costs Product shipment costs, included in selling, general and administrative expense in the accompanying Unaudited Consolidated Statements of Operations, were $5.7 million and $12.1 million for the three and six months ended June 30, 2020, respectively, and $6.9 million and $13.3 million for the three and six months ended June 30, 2019, respectively. The majority of the Company’s shipping costs are associated with providing instrument sets to hospitals for use in individual surgical procedures. Amounts billed to customers for shipping and handling of products are reflected in net sales and are not material for any period presented. |
Business Transition Costs | Business Transition Costs The Company incurs certain costs related to acquisition, integration and business transition activities, which include severance, relocation, consulting, leasehold exit costs, third-party merger and acquisition costs, contingent consideration fair value adjustments and other costs directly associated with such activities. Contingent consideration is accrued based on the fair value of the expected payment, and such accruals are subject to increase or decrease based on the assessment of the likelihood that the contingent milestones will be achieved resulting in payment. If an accrual for contingent consideration decreases during a particular period, it results in a reduction of costs during such period. During the three months ended June 30, 2020 0.5 June 30, 2020 T he Company recorded $1.6 million and $5.5 million , respectively. For the three months ended June 30, 2019, such costs consisted primarily of fair value adjustments on contingent consideration liabilities associated with the Company’s 2017 and 2016 acquisitions. For the six months ended June 30, 2019, such costs related to acquisition, integration and business transition activities, which included $ |
Description of Business and B_3
Description of Business and Basis of Presentation (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Summary of Changes in Allowance for Credit Losses | The following table summarizes the changes in the allowance for credit losses: (in thousands) June 30, 2020 Allowance for credit losses at January 1, 2020 $ 9,423 Current-period provision for expected losses 1,441 Write-offs charged against the allowance (406 ) Recoveries of amounts previously written off 48 Changes resulting from foreign currency fluctuations (80 ) Allowance for credit losses at end of period $ 10,426 |
Net (Loss) Income Per Share (Ta
Net (Loss) Income Per Share (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Consolidated Net (Loss) Income Per Share | The following table sets forth the computation of basic and diluted consolidated net (loss) income per share: Three Months Ended June 30, Six Months Ended June 30, ( in thousands, except per share data 2020 2019 2020 2019 Numerator: Net (loss) income $ (50,015 ) $ 14,962 $ (44,717 ) $ 24,348 Denominator for basic and diluted net (loss) income per share: Weighted average common shares outstanding for basic 51,224 51,967 51,531 51,822 Dilutive potential common stock outstanding: Stock options and employee stock purchase plan — 14 — 15 Restricted stock units — 479 — 634 Weighted average common shares outstanding for diluted 51,224 52,460 51,531 52,471 Basic net (loss) income per share $ (0.98 ) $ 0.29 $ (0.87 ) $ 0.47 Diluted net (loss) income per share $ (0.98 ) $ 0.29 $ (0.87 ) $ 0.46 |
Anti-dilutive Common Stock Equivalents Not Included in Calculation of Net (Loss) Income Per Diluted Share | The following weighted average outstanding common stock equivalents were not included in the calculation of net (loss) income per diluted share because their effects were anti-dilutive: Three Months Ended June 30, Six Months Ended June 30, ( in thousands 2020 2019 2020 2019 Stock options, employee stock purchase plan, and restricted stock units 1,112 60 621 163 Warrants 18,783 10,865 17,236 10,865 Senior Convertible Notes 15,689 10,865 10,257 10,865 Total 35,584 21,790 28,114 21,893 |
Financial Instruments and Fai_2
Financial Instruments and Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Schedule of Carrying Value and Amortized Cost of the Company's Marketable Securities | The carrying value and amortized cost of the Company’s marketable securities, summarized by major security type, consisted of the following: ( in thousands Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value June 30, 2020: Debt securities, available for sale: Corporate notes $ 22,298 $ — $ (41 ) $ 22,257 Commercial paper 107,804 13 (20 ) 107,797 Total debt securities, available for sale $ 130,102 $ 13 $ (61 ) $ 130,054 |
Schedule of Contractual Maturities of Marketable Debt Securities | Contractual maturities of marketable debt securities consisted of the following: ( in thousands Fair Value June 30, 2020: Debt securities, available for sale: Due within one year $ 117,898 Due within one to two years 12,156 Total debt securities, available for sale $ 130,054 |
Schedule of Fair Value of Assets and Liabilities Measured on Recurring Basis | Cash equivalents are determined under the fair value categories as follows: Quoted Price in Significant Other Significant Active Market Observable Inputs Unobservable ( in thousands Total (Level 1) (Level 2) Inputs (Level 3) June 30, 2020: Cash equivalents: Money market funds $ 711,260 $ 711,260 $ — $ — Commercial paper 11,997 — 11,997 — Total cash equivalents 723,257 711,260 11,997 — Debt securities, available for sale: Corporate notes 22,258 — 22,258 — Commercial paper 107,796 — 107,796 — Total debt securities, available for sale 130,054 — 130,054 — Total assets measured at fair value $ 853,311 $ 711,260 $ 142,051 $ — December 31, 2019: Cash equivalents: Money market funds $ 151,750 $ 151,750 $ — $ — Total cash equivalents $ 151,750 $ 151,750 $ — $ — |
Schedule of Estimated Fair Value of Assets and Liabilities Measured Using Significant Unobservable Inputs | The following tables set forth the changes in the estimated fair value for the Company’s assets and liabilities measured using significant unobservable inputs (Level 3): ( in thousands June 30, 2020 Assets: Fair value measurement at January 1, 2020 $ — Derivative assets recorded in connection with the 2023 Hedge 69,525 Change in fair value measurement (24,589 ) Fair value measurement at June 30, 2020 $ 44,936 ( in thousands June 30, 2020 Liabilities: Fair value measurement at January 1, 2020 $ — Derivative liability recorded in connection with the 2023 Notes 57,224 Change in fair value measurement (12,288 ) Fair value measurement at June 30, 2020 $ 44,936 |
Schedule of Inputs and Valuation Techniques Used in Recurring Level 3 Fair Value Measurements | The recurring Level 3 fair value measurements of contingent consideration liabilities associated with commercial sales milestones include the following significant unobservable inputs as of June 30, 2020 June 30, 2020 Valuation Technique Discounted cash flow Discount Rate Range 4.8% - 5.8% Weighted Average Discount Rate 5.3% Expected Years 2021 - 2024 |
Schedule of Fair Value of Liabilities Measured on Recurring Basis Using Unobservable Inputs | The following table sets forth the changes in the estimated fair value of the Company’s liabilities measured on a recurring basis using significant unobservable inputs (Level 3): Six Months Ended June 30, ( in thousands 2020 2019 Fair value measurement at January 1, 2020 $ 42,559 $ 50,410 Change in fair value measurement (1,521 ) 1,970 Contingent consideration paid or settled (7,938 ) (1,435 ) Changes resulting from foreign currency fluctuations — (59 ) Fair value measurement at June 30, 2020 $ 33,100 $ 50,886 |
2023 Hedge Derivative Asset and 2023 Notes Embedded Conversion Derivative liability [Member] | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Schedule of Inputs and Valuation Techniques Used in Recurring Level 3 Fair Value Measurements | The Level 3 fair value measurements of the Convertible Note Hedge Derivative Derivative June 30, 2020: June 30, 2020 Valuation Technique Black Scholes Volatility 42% Expected term (years) 2.9 Risk free interest rate 0.2% |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and intangible assets consisted of the following: Weighted- Average Amortization ( in thousands, except years Period Gross Accumulated Intangible June 30, 2020: (in years) Amount Amortization Assets, net Intangible assets subject to amortization: Developed technology 8 $ 271,748 $ (179,371 ) $ 92,377 Manufacturing know-how and trade secrets 13 30,800 (21,490 ) 9,310 Trade name and trademarks 9 25,500 (18,446 ) 7,054 Customer relationships 9 153,525 (84,659 ) 68,866 Total intangible assets subject to amortization 9 $ 481,573 $ (303,966 ) $ 177,607 Intangible assets not subject to amortization: Goodwill $ 559,088 Total goodwill and intangible assets, net $ 736,695 Weighted- Average Amortization Period Gross Accumulated Intangible December 31, 2019: (in years) Amount Amortization Assets, net Intangible assets subject to amortization: Developed technology 8 $ 271,748 $ (163,459 ) $ 108,289 Manufacturing know-how and trade secrets 13 30,798 (20,333 ) 10,465 Trade name and trademarks 9 25,500 (16,947 ) 8,553 Customer relationships 9 150,744 (76,959 ) 73,785 Total intangible assets subject to amortization 9 $ 478,790 $ (277,698 ) $ 201,092 Intangible assets not subject to amortization: Goodwill $ 561,064 Total goodwill and intangible assets, net $ 762,156 |
Schedule of Changes in The Carrying Value of Goodwill | The following table summarizes the changes in the carrying value of the Company’s goodwill: ( in thousands December 31, 2019 Gross goodwill $ 569,364 Accumulated impairment loss (8,300 ) 561,064 Changes to gross goodwill Changes resulting from foreign currency fluctuations (1,976 ) (1,976 ) June 30, 2020 Gross goodwill 567,388 Accumulated impairment loss (8,300 ) $ 559,088 |
Future Amortization Expense Related to Intangible Assets | Total future amortization expense related to intangible assets subject to amortization at June 30, 2020 is set forth in the table below: ( in thousands Remaining 2020 $ 26,519 2021 51,225 2022 42,670 2023 18,799 2024 13,030 Thereafter through 2031 25,364 Total future amortization expense $ 177,607 |
Indebtedness (Tables)
Indebtedness (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Carrying Value of Senior Convertible Notes | The carrying values of the Company’s Senior Convertible Notes are as follows: ( in thousands June 30, 2020 December 31, 2019 2.25% Senior Convertible Notes due 2021: Principal amount $ 650,000 $ 650,000 Unamortized debt discount (13,344 ) (22,501 ) Unamortized debt issuance costs (2,514 ) (4,201 ) 634,142 623,298 1.00% Senior Convertible Notes due 2023: Principal amount 450,000 — Unamortized debt discount (55,761 ) — Unamortized debt issuance costs (13,512 ) — 380,727 — 0.375% Senior Convertible Notes due 2025: Principal amount 450,000 — Unamortized debt discount (73,549 ) — Unamortized debt issuance costs (10,459 ) — 365,992 — Total Senior Convertible Notes $ 1,380,861 $ 623,298 Less: Current portion (634,142 ) — Long-term Senior Convertible Notes $ 746,719 $ 623,298 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Compensation Costs Included in Unaudited Consolidated Statement of Operations for All Stock-based Compensation Arrangements | The compensation cost that has been included in the Unaudited Consolidated Statements of Operations for the Company’s stock-based compensation plans was as follows: Three Months Ended June 30, Six Months Ended June 30, ( in thousands 2020 2019 2020 2019 Selling, general and administrative expense (benefit) $ 3,546 $ 5,911 $ (615 ) $ 10,690 Research and development expense 1,432 752 2,755 1,652 Cost of sales 115 238 95 276 Stock-based compensation expense before taxes 5,093 6,901 2,235 12,618 Related income tax expense (benefit) 587 (1,725 ) 258 (3,155 ) Stock-based compensation expense, net of taxes $ 5,680 $ 5,176 $ 2,493 $ 9,463 |
Weighted Average Assumptions Used to Estimate Fair Value of Stock Purchase Rights under ESPP | The weighted average assumptions used to estimate the fair value of stock purchase rights under the employee stock purchase plan (“ESPP”) are as follows: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 ESPP Volatility 66 % 37 % 47 % 37 % Expected term (years) 0.5 0.5 0.5 0.5 Risk free interest rate 0.4 % 2.4 % 1.0 % 2.5 % Expected dividend yield — % — % — % — % |
Business Segment, Product and G
Business Segment, Product and Geographic Information (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Net Sales by Product Line | Net sales by product line was as follows: Three Months Ended June 30, Six Months Ended June 30, ( in thousands 2020 2019 2020 2019 Spinal hardware $ 152,818 $ 212,634 $ 343,687 $ 409,772 Surgical support 50,794 79,471 119,806 157,109 Total net sales $ 203,612 $ 292,105 $ 463,493 $ 566,881 |
Schedule of Net Sales and Net Property and Equipment by Geographical Area | Net sales and property and equipment, net, by geographic area were as follows: Net Sales Property and Equipment, Net Three Months Ended June 30, Six Months Ended June 30, June 30, December 31, ( in thousands 2020 2019 2020 2019 2020 2019 United States $ 161,457 $ 236,128 $ 365,489 $ 458,941 $ 228,882 $ 218,771 International (excludes Puerto Rico) 42,155 55,977 98,004 107,940 50,280 47,547 Total $ 203,612 $ 292,105 $ 463,493 $ 566,881 $ 279,162 $ 266,318 |
Commitments (Tables)
Commitments (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Right-of-use Assets and Lease Liabilities | The table below summarizes the Company’s right-of-use assets and lease liabilities as of June 30, 2020 and December 31, 2019 (in thousands) June 30, 2020 December 31, 2019 Assets Operating $ 105,863 $ 66,932 Financing 2,552 1,453 Total leased assets $ 108,415 $ 68,385 Liabilities Current: Operating $ 7,502 $ 5,567 Financing 1,231 672 Long-term: Operating 114,881 73,153 Financing 1,462 905 Total lease liabilities $ 125,076 $ 80,297 Supplemental non-cash information: Weighted-average remaining lease term (years) - operating leases 13.2 12.4 Weighted-average remaining lease term (years) - finance leases 2.1 2.3 Weighted-average discount rate - operating leases 5.5 % 7.3 % Weighted-average discount rate - finance leases 5.1 % 5.4 % |
Lease Costs, Cash Payments and Operating Lease Liabilities Arising From Obtaining Right-of-use Assets under Operating and Financing Lease Obligations | The table below summarizes the Company’s lease costs, cash payments, and operating lease liabilities arising from obtaining right-of-use assets under its operating and financing lease obligations were as follows Three Months Ended June 30, Six Months Ended June 30, (in thousands, except years and rates) 2020 2019 2020 2019 Lease expense: Operating lease expense $ 3,953 $ 2,964 $ 7,460 $ 5,786 Finance lease expense: Depreciation of right-of-use assets 305 99 563 197 Interest expense on lease liabilities 31 12 59 26 Total lease expense $ 4,289 $ 3,075 $ 8,082 $ 6,009 Consolidated Statements of Cash Flows information: Operating cash flows used for operating leases $ 3,700 $ 3,153 $ 6,996 $ 6,172 Operating cash flows used for financing leases 31 12 59 26 Financing cash flows used for financing leases 295 93 542 185 Total cash paid for amounts included in the measurement of lease liabilities $ 4,026 $ 3,258 $ 7,597 $ 6,383 Supplemental non-cash information: Operating lease liabilities arising from obtaining right-of-use assets $ 543 $ 2,496 $ 39,805 $ 77,605 |
Future Minimum Annual Lease Payments under Operating and Financing Leases | The Company’s future minimum annual lease payments under operating and financing leases at June 30, 2020 are as follows: Financing Operating (in thousands) Leases Leases Remaining 2020 $ 662 $ 6,974 2021 1,226 13,798 2022 864 13,332 2023 74 12,991 2024 9 11,995 Thereafter — 116,884 Total minimum lease payments $ 2,835 $ 175,974 Less: amount representing interest (142 ) (53,591 ) Present value of obligations under leases 2,693 122,383 Less: current portion (1,231 ) (7,502 ) Long-term lease obligations $ 1,462 $ 114,881 |
Description of Business and B_4
Description of Business and Basis of Presentation (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Schedule Of Description Of Business And Basis Of Presentation [Line Items] | |||||
Inventory, finished goods | $ 299,000,000 | $ 299,000,000 | $ 298,700,000 | ||
Inventory, work in progress | 5,700,000 | 5,700,000 | 6,400,000 | ||
Inventory, raw materials | 7,500,000 | 7,500,000 | 7,300,000 | ||
Reserve for excess and obsolete inventory | 25,200,000 | $ 3,300,000 | 30,500,000 | $ 6,400,000 | |
Translation Adjustment Functional to Reporting Currency, Net of Tax | 12,200,000 | 12,200,000 | $ 9,400,000 | ||
Product shipment costs | 80,505,000 | 77,579,000 | 152,370,000 | 152,073,000 | |
Business transition costs (recoveries) | 874,000 | 1,646,000 | (566,000) | 5,479,000 | |
2017 and 2016 Acquisitions [Member] | |||||
Schedule Of Description Of Business And Basis Of Presentation [Line Items] | |||||
Business transition costs (recoveries) | 500,000 | (1,600,000) | 2,000,000 | ||
Product Shipment [Member] | |||||
Schedule Of Description Of Business And Basis Of Presentation [Line Items] | |||||
Product shipment costs | 5,700,000 | $ 6,900,000 | 12,100,000 | $ 13,300,000 | |
ASU 2016-13 [Member] | |||||
Schedule Of Description Of Business And Basis Of Presentation [Line Items] | |||||
Cumulative impact of new accounting principle towards retained earnings | $ 0 | ||||
ASU 2019-12 [Member] | |||||
Schedule Of Description Of Business And Basis Of Presentation [Line Items] | |||||
Recognized tax benefits, period increase | $ 2,900,000 |
Description of Business and B_5
Description of Business and Basis of Presentation - Summary of Changes in Allowance for Credit Losses (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Description Of Business And Basis Of Presentation [Abstract] | |
Allowance for credit loss at beginning of period | $ 9,423 |
Current-period provision for expected losses | 1,441 |
Write-offs charged against the allowance | (406) |
Recoveries of amounts previously written off | 48 |
Changes resulting from foreign currency fluctuations | (80) |
Allowance for credit losses at end of period | $ 10,426 |
Net (Loss) Income Per Share - C
Net (Loss) Income Per Share - Computation of Basic and Diluted Consolidated Net (Loss) Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Numerator: | ||||||
Net (loss) income | $ (50,015) | $ 5,298 | $ 14,962 | $ 9,386 | $ (44,717) | $ 24,348 |
Denominator for basic and diluted net (loss) income per share: | ||||||
Weighted average common shares outstanding for basic | 51,224 | 51,967 | 51,531 | 51,822 | ||
Dilutive potential common stock outstanding: | ||||||
Weighted average common shares outstanding for diluted | 51,224 | 52,460 | 51,531 | 52,471 | ||
Basic net (loss) income per share | $ (0.98) | $ 0.29 | $ (0.87) | $ 0.47 | ||
Diluted net (loss) income per share | $ (0.98) | $ 0.29 | $ (0.87) | $ 0.46 | ||
Stock Options and Employee Stock Purchase Plan [Member] | ||||||
Dilutive potential common stock outstanding: | ||||||
Incremental common shares from share based payments | 14 | 15 | ||||
Restricted Stock Units [Member] | ||||||
Dilutive potential common stock outstanding: | ||||||
Incremental common shares from share based payments | 479 | 634 |
Net (Loss) Income Per Share - A
Net (Loss) Income Per Share - Anti-dilutive Common Stock Equivalents Not Included in Calculation of Net (Loss) Income Per Diluted Share (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of earnings per share | 35,584 | 21,790 | 28,114 | 21,893 |
Stock Options, Employee Stock Purchase Plan, and Restricted Stock Units [Member] | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of earnings per share | 1,112 | 60 | 621 | 163 |
Warrants [Member] | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of earnings per share | 18,783 | 10,865 | 17,236 | 10,865 |
Senior Convertible Notes [Member] | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of earnings per share | 15,689 | 10,865 | 10,257 | 10,865 |
Financial Instruments and Fai_3
Financial Instruments and Fair Value Measurements - Schedule of Carrying Value and Amortized Cost of Company's Marketable Securities (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Amortized Cost | $ 130,102 |
Gross Unrealized Gains | 13 |
Gross Unrealized Losses | (61) |
Fair Value | 130,054 |
Corporate Notes [Member] | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Amortized Cost | 22,298 |
Gross Unrealized Losses | (41) |
Fair Value | 22,257 |
Commercial Paper [Member] | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Amortized Cost | 107,804 |
Gross Unrealized Gains | 13 |
Gross Unrealized Losses | (20) |
Fair Value | $ 107,797 |
Financial Instruments and Fai_4
Financial Instruments and Fair Value Measurements - Schedule of Contractual Maturities of Marketable Debt Securities (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Debt securities, available for sale: | |
Due within one year | $ 117,898 |
Due within one to two years | 12,156 |
Total debt securities, available for sale | $ 130,054 |
Financial Instruments and Fai_5
Financial Instruments and Fair Value Measurements (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 01, 2020 | Dec. 31, 2019 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Currency exchange (losses) gains from derivatives instruments | $ 600,000 | $ 100,000 | $ (5,200,000) | $ (200,000) | ||
Net (losses) gains recognized on derivative instruments | (12,301,000) | |||||
Contingent consideration liabilities | 5,683,000 | 5,683,000 | $ 15,727,000 | |||
Contingent Consideration Liabilities [Member] | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Contingent consideration liabilities | $ 33,100,000 | $ 33,100,000 | 42,600,000 | |||
Convertible Notes due 2023 [Member] | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Notional principal amount | $ 450,000,000 | |||||
Senior convertible notes rate | 1.00% | |||||
Convertible note hedge transactions purchase of common stock | 5,345,010 | |||||
Convertible note hedge transactions initial stock price per share | $ 84.19 | $ 84.19 | ||||
Quoted Price in Active Market (Level 1) [Member] | Convertible Notes due 2021 [Member] | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Notional principal amount | $ 650,000,000 | $ 650,000,000 | 650,000,000 | |||
Debt instrument, fair value disclosure | 703,600,000 | 703,600,000 | 869,300,000 | |||
Quoted Price in Active Market (Level 1) [Member] | Convertible Notes due 2023 [Member] | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Notional principal amount | 450,000,000 | 450,000,000 | ||||
Debt instrument, fair value disclosure | 429,200,000 | 429,200,000 | ||||
Quoted Price in Active Market (Level 1) [Member] | Convertible Notes due 2025 [Member] | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Notional principal amount | 450,000,000 | 450,000,000 | ||||
Debt instrument, fair value disclosure | 395,800,000 | 395,800,000 | ||||
Foreign Exchange Forward [Member] | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Notional principal amount | 18,000,000 | 18,000,000 | 26,900,000 | |||
Foreign Exchange Forward [Member] | Other Current Assets or Other Current Liabilities [Member] | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Fair value of derivative instrument liability | (100,000) | (100,000) | $ (100,000) | |||
Foreign Exchange Forward [Member] | Other (Expense) Income [Member] | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Net (losses) gains recognized on derivative instruments | $ (200,000) | $ (400,000) | $ (200,000) | $ (100,000) |
Financial Instruments and Fai_6
Financial Instruments and Fair Value Measurements - Schedule of Fair Value of Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Cash Equivalents and Marketable Securities | ||
Fair Value | $ 130,054 | |
Commercial Paper [Member] | ||
Cash Equivalents and Marketable Securities | ||
Fair Value | 107,797 | |
Corporate Notes [Member] | ||
Cash Equivalents and Marketable Securities | ||
Fair Value | 22,257 | |
Fair Value, Recurring [Member] | ||
Cash Equivalents and Marketable Securities | ||
Total cash equivalents | 723,257 | $ 151,750 |
Fair Value | 130,054 | |
Total assets measured at fair value | 853,311 | |
Fair Value, Recurring [Member] | Commercial Paper [Member] | ||
Cash Equivalents and Marketable Securities | ||
Total cash equivalents | 11,997 | |
Fair Value | 107,796 | |
Fair Value, Recurring [Member] | Corporate Notes [Member] | ||
Cash Equivalents and Marketable Securities | ||
Fair Value | 22,258 | |
Fair Value, Recurring [Member] | Money Market Funds [Member] | ||
Cash Equivalents and Marketable Securities | ||
Total cash equivalents | 711,260 | 151,750 |
Fair Value, Recurring [Member] | Quoted Price in Active Market (Level 1) [Member] | ||
Cash Equivalents and Marketable Securities | ||
Total cash equivalents | 711,260 | 151,750 |
Total assets measured at fair value | 711,260 | |
Fair Value, Recurring [Member] | Quoted Price in Active Market (Level 1) [Member] | Money Market Funds [Member] | ||
Cash Equivalents and Marketable Securities | ||
Total cash equivalents | 711,260 | $ 151,750 |
Fair Value, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Cash Equivalents and Marketable Securities | ||
Total cash equivalents | 11,997 | |
Fair Value | 130,054 | |
Total assets measured at fair value | 142,051 | |
Fair Value, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | Commercial Paper [Member] | ||
Cash Equivalents and Marketable Securities | ||
Total cash equivalents | 11,997 | |
Fair Value | 107,796 | |
Fair Value, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | Corporate Notes [Member] | ||
Cash Equivalents and Marketable Securities | ||
Fair Value | $ 22,258 |
Financial Instruments and Fai_7
Financial Instruments and Fair Value Measurements - Schedule of Fair Value of Assets and Liabilities Measured Using Significant Unobservable Inputs (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Assets: | |
Derivative assets purchased | $ 69,525 |
Change in fair value measurement | (24,589) |
Fair value measurement at beginning of period | 44,936 |
Liabilities: | |
Fair value measurement at beginning of period | 44,936 |
Change in fair value measurement | (12,288) |
2023 Notes [Member] | |
Liabilities: | |
Derivative liability recorded in connection with the 2023 Notes | $ 57,224 |
Financial Instruments and Fai_8
Financial Instruments and Fair Value Measurements - Schedule of Recurring Fair Value Measurements of Hedge Derivative Asset and Embedded Conversion Derivative Liability (Details) - Level 3 [Member] - 2023 Hedge Derivative Asset and 2023 Notes Embedded Conversion Derivative Liability [Member] - Fair Value, Recurring [Member] | 6 Months Ended |
Jun. 30, 2020 | |
Expected Term (Years) | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Expected term (years) | 2 years 10 months 24 days |
Risk Free Interest Rate [Member] | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Weighted average measurement input | 0.002 |
Volatility [Member] | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Weighted average measurement input | 0.42 |
Financial Instruments and Fai_9
Financial Instruments and Fair Value Measurements - Schedule of Recurring Fair Value Measurements of Contingent Consideration Liabilities (Details) - Level 3 [Member] - Commercial Sale Milestone [Member] - Fair Value, Recurring [Member] | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Business Combination, Contingent Consideration, Liability, Valuation Technique [Extensible List] | us-gaap:ValuationTechniqueDiscountedCashFlowMember |
Discount Rate [Member] | Minimum [Member] | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Weighted average measurement input | 0.048 |
Discount Rate [Member] | Maximum [Member] | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Weighted average measurement input | 0.058 |
Discount Rate [Member] | Weighted Average [Member] | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Weighted average measurement input | 0.053 |
Expected Years [Member] | Minimum [Member] | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Expected Years | 2021 |
Expected Years [Member] | Maximum [Member] | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Expected Years | 2024 |
Financial Instruments and Fa_10
Financial Instruments and Fair Value Measurements - Schedule of Fair Value of Liabilities Measured on Recurring Basis Using Unobservable Inputs (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Change in fair value measurement | $ (12,288) | |
Fair value measurement at end of period | 44,936 | |
Contingent Consideration Liabilities [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fair value measurement at beginning of period | 42,559 | $ 50,410 |
Change in fair value measurement | (1,521) | 1,970 |
Contingent consideration paid or settled | (7,938) | (1,435) |
Changes resulting from foreign currency fluctuations | (59) | |
Fair value measurement at end of period | $ 33,100 | $ 50,886 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Intangible assets subject to amortization: | ||
Weighted Average Amortization Period | 9 years | 9 years |
Gross Amount | $ 481,573 | $ 478,790 |
Accumulated Amortization | (303,966) | (277,698) |
Intangible Assets, net | 177,607 | 201,092 |
Intangible assets not subject to amortization: | ||
Goodwill | 559,088 | 561,064 |
Total goodwill and intangible assets, net | $ 736,695 | $ 762,156 |
Developed Technology [Member] | ||
Intangible assets subject to amortization: | ||
Weighted Average Amortization Period | 8 years | 8 years |
Gross Amount | $ 271,748 | $ 271,748 |
Accumulated Amortization | (179,371) | (163,459) |
Intangible Assets, net | $ 92,377 | $ 108,289 |
Manufacturing know-how and trade secrets [Member] | ||
Intangible assets subject to amortization: | ||
Weighted Average Amortization Period | 13 years | 13 years |
Gross Amount | $ 30,800 | $ 30,798 |
Accumulated Amortization | (21,490) | (20,333) |
Intangible Assets, net | $ 9,310 | $ 10,465 |
Trade name and trademarks [Member] | ||
Intangible assets subject to amortization: | ||
Weighted Average Amortization Period | 9 years | 9 years |
Gross Amount | $ 25,500 | $ 25,500 |
Accumulated Amortization | (18,446) | (16,947) |
Intangible Assets, net | $ 7,054 | $ 8,553 |
Customer relationships [Member] | ||
Intangible assets subject to amortization: | ||
Weighted Average Amortization Period | 9 years | 9 years |
Gross Amount | $ 153,525 | $ 150,744 |
Accumulated Amortization | (84,659) | (76,959) |
Intangible Assets, net | $ 68,866 | $ 73,785 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Changes in the Carrying Value of Goodwill (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Gross goodwill | $ 567,388 | $ 569,364 |
Accumulated impairment loss | (8,300) | (8,300) |
Goodwill | 559,088 | $ 561,064 |
Changes to gross goodwill | ||
Changes resulting from foreign currency fluctuations | (1,976) | |
Goodwill period increase (decrease) | $ (1,976) |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets (Details Textual) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||||
Amortization expense related to intangible assets | $ 13.5 | $ 13.2 | $ 27 | $ 27.7 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Future Amortization Expense Related to Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Future amortization expense related to intangible assets | ||
Remaining 2020 | $ 26,519 | |
2021 | 51,225 | |
2022 | 42,670 | |
2023 | 18,799 | |
2024 | 13,030 | |
Thereafter through 2031 | 25,364 | |
Intangible Assets, net | $ 177,607 | $ 201,092 |
Indebtedness - Carrying Value o
Indebtedness - Carrying Value of Senior Convertible Notes (Details) - USD ($) | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2016 |
Debt Instrument [Line Items] | ||||
Total Senior Convertible Notes | $ 1,380,861,000 | $ 623,298,000 | ||
Less: Current portion | (634,142,000) | |||
Long-term Senior Convertible Notes | 746,719,000 | 623,298,000 | ||
2.25% Senior Convertible Notes [Member] | Convertible Notes due 2021 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal amount | 650,000,000 | 650,000,000 | $ 650,000,000 | |
Unamortized debt discount | (13,344,000) | (22,501,000) | ||
Unamortized debt issuance costs | (2,514,000) | (4,201,000) | ||
Total Senior Convertible Notes | 634,142,000 | $ 623,298,000 | ||
1.00% Senior Convertible Notes [Member] | Convertible Notes due 2023 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal amount | 450,000,000 | |||
Unamortized debt discount | (55,761,000) | |||
Unamortized debt issuance costs | (13,512,000) | |||
Total Senior Convertible Notes | 380,727,000 | |||
0.375% Senior Convertible Notes [Member] | Convertible Notes due 2025 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal amount | 450,000,000 | $ 450,000,000 | ||
Unamortized debt discount | (73,549,000) | |||
Unamortized debt issuance costs | (10,459,000) | |||
Total Senior Convertible Notes | $ 365,992,000 |
Indebtedness - Carrying Value_2
Indebtedness - Carrying Value of Senior Convertible Notes (Parenthetical) (Details) | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2016 |
2.25% Senior Convertible Notes [Member] | Convertible Notes due 2021 [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate on convertible notes | 2.25% | 2.25% | 2.25% | |
1.00% Senior Convertible Notes [Member] | Convertible Notes due 2023 [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate on convertible notes | 1.00% | |||
0.375% Senior Convertible Notes [Member] | Convertible Notes due 2025 [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate on convertible notes | 0.375% | 0.375% | 0.375% |
Indebtedness (Details Textual)
Indebtedness (Details Textual) | Jun. 01, 2020USD ($)d$ / sharesshares | Mar. 31, 2020USD ($)d$ / sharesshares | Feb. 29, 2020USD ($) | Mar. 31, 2016USD ($)$ / sharesshares | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)d | Jun. 30, 2019USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2019USD ($) | Mar. 18, 2016$ / sharesshares |
Debt Instrument [Line Items] | |||||||||||
Proceeds from issuance of convertible debt, net of issuance costs | $ 874,404,000 | ||||||||||
Cash proceeds from the sale of warrants | 93,915,000 | ||||||||||
Revolving Senior Credit Facility [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit facility, maximum borrowing capacity | $ 550,000,000 | ||||||||||
Credit facility, expiration date | 2025-02 | ||||||||||
Loan outstanding | $ 0 | 0 | $ 0 | ||||||||
Revolving Senior Credit Facility [Member] | Federal Funds Effective Rate [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit facility bear interest rate | 0.50% | ||||||||||
Revolving Senior Credit Facility [Member] | Eurocurrency Rate [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit facility bear interest rate | 1.00% | ||||||||||
Multicurrency Borrowings [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit facility, maximum borrowing capacity | $ 250,000,000 | ||||||||||
Standby Letters of Credit [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit facility, maximum borrowing capacity | 50,000,000 | ||||||||||
Swing Line Loans [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit facility, maximum borrowing capacity | $ 5,000,000 | ||||||||||
2021 Warrants [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Cash proceeds from the sale of warrants | $ 44,900,000 | ||||||||||
Warrant strike price | $ / shares | $ 80 | ||||||||||
2023 Warrants [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Cash proceeds from the sale of warrants | $ 46,800,000 | ||||||||||
Warrant strike price | $ / shares | $ 104.84 | ||||||||||
2025 Warrants [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Cash proceeds from the sale of warrants | $ 47,100,000 | ||||||||||
Warrant strike price | $ / shares | $ 127.84 | ||||||||||
2021 Hedge [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Number of common stock to be purchased | shares | 10,865,270 | ||||||||||
Stock price | $ / shares | $ 59.82 | ||||||||||
Derivative, maturity date | Mar. 15, 2021 | ||||||||||
2023 Hedge [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Number of common stock to be purchased | shares | 5,345,010 | ||||||||||
Stock price | $ / shares | $ 84.19 | ||||||||||
Cost of hedge transaction | $ 69,500,000 | ||||||||||
Derivative, maturity date | Jun. 1, 2023 | ||||||||||
2025 Hedge [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Number of common stock to be purchased | shares | 4,823,910 | ||||||||||
Stock price | $ / shares | $ 93.29 | ||||||||||
Derivative, maturity date | Mar. 15, 2025 | ||||||||||
Minimum [Member] | Revolving Senior Credit Facility [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Unused line fee | 0.35% | ||||||||||
Minimum [Member] | Revolving Senior Credit Facility [Member] | Eurocurrency Rate [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit facility bear interest rate | 1.50% | ||||||||||
Minimum [Member] | Revolving Senior Credit Facility [Member] | Base Rate [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit facility bear interest rate | 0.50% | ||||||||||
Minimum [Member] | 2021 Warrants [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Class of warrant or rights expiry month and year | 2021-06 | ||||||||||
Minimum [Member] | 2023 Warrants [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Class of warrant or rights expiry month and year | 2023-09 | ||||||||||
Minimum [Member] | 2025 Warrants [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Class of warrant or rights expiry month and year | 2025-06 | ||||||||||
Maximum [Member] | Revolving Senior Credit Facility [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Unused line fee | 0.50% | ||||||||||
Maximum [Member] | Revolving Senior Credit Facility [Member] | Eurocurrency Rate [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit facility bear interest rate | 2.25% | ||||||||||
Maximum [Member] | Revolving Senior Credit Facility [Member] | Base Rate [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit facility bear interest rate | 1.25% | ||||||||||
Maximum [Member] | 2021 Warrants [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Class of warrant or rights expiry month and year | 2021-12 | ||||||||||
Maximum [Member] | 2023 Warrants [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Class of warrant or rights expiry month and year | 2023-11 | ||||||||||
Maximum [Member] | 2025 Warrants [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Class of warrant or rights expiry month and year | 2025-10 | ||||||||||
Additional Paid-in Capital [Member] | 2021 Hedge [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Cost of hedge transaction | $ 111,200,000 | ||||||||||
Additional Paid-in Capital [Member] | 2025 Hedge [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Cost of hedge transaction | 78,300,000 | 78,300,000 | |||||||||
Common Stock [Member] | Maximum [Member] | 2021 Warrants [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Number of preferred or common stock into which the warrants is converted | shares | 10,865,270 | ||||||||||
Common Stock [Member] | Maximum [Member] | 2023 Warrants [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Number of preferred or common stock into which the warrants is converted | shares | 3,093,500 | ||||||||||
Common Stock [Member] | Maximum [Member] | 2025 Warrants [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Number of preferred or common stock into which the warrants is converted | shares | 4,823,910 | ||||||||||
2.25% Senior Convertible Notes [Member] | Convertible Notes due 2021 [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Principal amount | 650,000,000 | $ 650,000,000 | $ 650,000,000 | $ 650,000,000 | |||||||
Proceeds from issuance of convertible debt, net of issuance costs | $ 634,100,000 | ||||||||||
Interest rate on convertible notes | 2.25% | 2.25% | 2.25% | 2.25% | |||||||
Debt instrument, maturity date | Mar. 15, 2021 | ||||||||||
Initial conversion rate adjustment, shares | 16.7158 | ||||||||||
Principal amount of debt considered for conversion rate | $ 1,000 | ||||||||||
Initial conversion price of convertible notes | $ / shares | $ 59.82 | ||||||||||
Contractual coupon interest expense | $ 3,700,000 | $ 3,700,000 | $ 7,300,000 | $ 7,300,000 | |||||||
Amortization of debt discount (premium) | 4,600,000 | 4,400,000 | 9,200,000 | 8,700,000 | |||||||
Amortization of debt issuance costs | $ 900,000 | $ 800,000 | $ 1,700,000 | $ 1,500,000 | |||||||
Effective interest rate | 5.80% | 5.80% | |||||||||
Debt redemption price percentage | 100.00% | ||||||||||
Principal payments due | $ 0 | $ 0 | |||||||||
2.25% Senior Convertible Notes [Member] | Convertible Notes due 2021 [Member] | Scenario Two [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consecutive trading days considered for debt conversion | d | 5 | ||||||||||
2.25% Senior Convertible Notes [Member] | Convertible Notes due 2021 [Member] | Minimum [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Percentage of conversion price | 130.00% | ||||||||||
2.25% Senior Convertible Notes [Member] | Convertible Notes due 2021 [Member] | Minimum [Member] | Scenario One [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consecutive trading days considered for debt conversion | d | 20 | ||||||||||
2.25% Senior Convertible Notes [Member] | Convertible Notes due 2021 [Member] | Maximum [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Percentage of conversion price | 98.00% | ||||||||||
2.25% Senior Convertible Notes [Member] | Convertible Notes due 2021 [Member] | Maximum [Member] | Scenario One [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consecutive trading days considered for debt conversion | d | 30 | ||||||||||
2.25% Senior Convertible Notes [Member] | Convertible Notes due 2021 [Member] | Additional Paid-in Capital [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Amount reclassified to stockholders' equity | $ 84,800,000 | ||||||||||
1.00% Senior Convertible Notes [Member] | Convertible Notes due 2023 [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Principal amount | $ 450,000,000 | ||||||||||
Proceeds from issuance of convertible debt, net of issuance costs | $ 436,200,000 | ||||||||||
Interest rate on convertible notes | 1.00% | ||||||||||
Debt instrument, maturity date | Jun. 1, 2023 | ||||||||||
Initial conversion rate adjustment, shares | 11.8778 | ||||||||||
Principal amount of debt considered for conversion rate | $ 1,000 | ||||||||||
Initial conversion price of convertible notes | $ / shares | $ 84.19 | ||||||||||
Contractual coupon interest expense | 400,000 | $ 400,000 | |||||||||
Amortization of debt discount (premium) | 1,500,000 | 1,500,000 | |||||||||
Amortization of debt issuance costs | $ 300,000 | $ 300,000 | |||||||||
Effective interest rate | 6.80% | 6.80% | |||||||||
Fair value of embedded conversion derivative | $ 57,200,000 | ||||||||||
1.00% Senior Convertible Notes [Member] | Convertible Notes due 2023 [Member] | Scenario Two [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Principal amount of debt considered for conversion rate | $ 1,000 | ||||||||||
Consecutive trading days considered for debt conversion | d | 5 | ||||||||||
1.00% Senior Convertible Notes [Member] | Convertible Notes due 2023 [Member] | Minimum [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Percentage of conversion price | 130.00% | ||||||||||
1.00% Senior Convertible Notes [Member] | Convertible Notes due 2023 [Member] | Minimum [Member] | Scenario One [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consecutive trading days considered for debt conversion | d | 20 | ||||||||||
1.00% Senior Convertible Notes [Member] | Convertible Notes due 2023 [Member] | Maximum [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Percentage of conversion price | 98.00% | ||||||||||
1.00% Senior Convertible Notes [Member] | Convertible Notes due 2023 [Member] | Maximum [Member] | Scenario One [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consecutive trading days considered for debt conversion | d | 30 | ||||||||||
0.375% Senior Convertible Notes [Member] | Convertible Notes due 2025 [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Principal amount | $ 450,000,000 | $ 450,000,000 | $ 450,000,000 | ||||||||
Proceeds from issuance of convertible debt, net of issuance costs | $ 437,000,000 | ||||||||||
Interest rate on convertible notes | 0.375% | 0.375% | 0.375% | 0.375% | |||||||
Debt instrument, maturity date | Mar. 15, 2025 | ||||||||||
Initial conversion rate adjustment, shares | 10.7198 | ||||||||||
Principal amount of debt considered for conversion rate | $ 1,000 | ||||||||||
Initial conversion price of convertible notes | $ / shares | $ 93.29 | ||||||||||
Contractual coupon interest expense | $ 400,000 | $ 600,000 | |||||||||
Amortization of debt discount (premium) | 3,500,000 | 4,700,000 | |||||||||
Amortization of debt issuance costs | $ 400,000 | $ 600,000 | |||||||||
Effective interest rate | 4.90% | 4.90% | |||||||||
Percentage of conversion price | 130.00% | ||||||||||
Debt redemption price percentage | 100.00% | ||||||||||
Principal payments due | $ 0 | ||||||||||
0.375% Senior Convertible Notes [Member] | Convertible Notes due 2025 [Member] | Scenario Two [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Principal amount of debt considered for conversion rate | $ 1,000 | ||||||||||
Consecutive trading days considered for debt conversion | d | 5 | ||||||||||
0.375% Senior Convertible Notes [Member] | Convertible Notes due 2025 [Member] | Minimum [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consecutive trading days considered for debt conversion | d | 20 | ||||||||||
Percentage of conversion price | 130.00% | ||||||||||
0.375% Senior Convertible Notes [Member] | Convertible Notes due 2025 [Member] | Minimum [Member] | Scenario One [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consecutive trading days considered for debt conversion | d | 20 | ||||||||||
0.375% Senior Convertible Notes [Member] | Convertible Notes due 2025 [Member] | Maximum [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consecutive trading days considered for debt conversion | d | 30 | ||||||||||
Percentage of conversion price | 98.00% | ||||||||||
0.375% Senior Convertible Notes [Member] | Convertible Notes due 2025 [Member] | Maximum [Member] | Scenario One [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consecutive trading days considered for debt conversion | d | 30 | ||||||||||
0.375% Senior Convertible Notes [Member] | Convertible Notes due 2025 [Member] | Additional Paid-in Capital [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Amount reclassified to stockholders' equity | $ 78,300,000 |
Shareholders' Equity (Details T
Shareholders' Equity (Details Textual) - Common Stock [Member] - USD ($) | 1 Months Ended | ||
Mar. 31, 2020 | Feb. 29, 2020 | Oct. 31, 2017 | |
Equity Class Of Treasury Stock [Line Items] | |||
Share repurchase program, authorized amount | $ 150,000,000 | ||
Share repurchase program, period in force | 3 years | ||
Share repurchase program, expiration month and year | 2020-10 | ||
Share repurchase program, expiration date | Dec. 31, 2021 | ||
0.375% Senior Convertible Notes [Member] | Convertible Notes due 2025 [Member] | |||
Equity Class Of Treasury Stock [Line Items] | |||
Shares repurchased during period | 1,085,000 | ||
Shares repurchased during period, value | $ 75,000,000 | ||
Maximum [Member] | |||
Equity Class Of Treasury Stock [Line Items] | |||
Share repurchase program, authorized amount | $ 100,000,000 |
Stock-Based Compensation - Comp
Stock-Based Compensation - Compensation Costs Included in Unaudited Consolidated Statement of Operations for All Stock-based Compensation Arrangements (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense before taxes | $ 5,093 | $ 6,901 | $ 2,235 | $ 12,618 |
Related income tax expense (benefit) | 587 | (1,725) | 258 | (3,155) |
Stock-based compensation expense, net of taxes | 5,680 | 5,176 | 2,493 | 9,463 |
Selling, General and Administrative Expense (Benefit) [Member] | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense before taxes | 3,546 | 5,911 | (615) | 10,690 |
Research and Development Expense [Member] | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense before taxes | 1,432 | 752 | 2,755 | 1,652 |
Cost of Sales [Member] | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense before taxes | $ 115 | $ 238 | $ 95 | $ 276 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock options granted | 0 | ||
Number of common stock issued to exercise stock options | 3,000 | 3,000 | 33,000 |
ESPP [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Maximum percentage of annual compensation | 15.00% | 15.00% | |
Maximum amount withheld to purchase shares of the company | $ 21,250 | ||
Percentage of issuance price of stock under the stock issuance program | 85.00% | ||
ESPP offering period | 6 months | ||
Restricted Stock Units (RSUs) [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Unamortized cost related to share-based compensation | $ 49,800,000 | $ 49,800,000 | |
Weighted average contractual term | 2 years 4 months 24 days | ||
Performance Based Restricted Stock Units (PRSUs) [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Unamortized cost related to share-based compensation | $ 49,800,000 | $ 49,800,000 | |
Weighted average contractual term | 2 years 4 months 24 days | ||
Restricted Stock Units (RSUs) and Performance-Based Restricted Stock Units (PRSUs) [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of shares of common stock issued upon vesting of RSUs and PRSUs | 13,000 | 177,000 | 642,000 |
Stock-Based Compensation - Weig
Stock-Based Compensation - Weighted Average Assumptions Used to Estimate Fair Value of Stock Purchase Rights under ESPP (Details) - ESPP [Member] | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Weighted average assumptions used to estimate fair value of stock options granted and stock purchase rights under ESPP | ||||
Volatility | 66.00% | 37.00% | 47.00% | 37.00% |
Expected term (years) | 6 months | 6 months | 6 months | 6 months |
Risk free interest rate | 0.40% | 2.40% | 1.00% | 2.50% |
Income Taxes (Details Textual)
Income Taxes (Details Textual) $ in Millions | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Income Tax Disclosure [Abstract] | |
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Percent | 19.00% |
Increase in gross unrecognized tax benefits | $ 3.5 |
Remaining unrecognized tax positions | $ 5.8 |
Business Segment, Product and_2
Business Segment, Product and Geographic Information (Details Textual) | 6 Months Ended |
Jun. 30, 2020segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |
Number of reportable segments | 1 |
Business Segment, Product and_3
Business Segment, Product and Geographic Information - Schedule of Net Sales by Product Line (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Entity Wide Information Revenue From External Customer [Line Items] | ||||
Net sales | $ 203,612 | $ 292,105 | $ 463,493 | $ 566,881 |
Spinal Hardware [Member] | ||||
Entity Wide Information Revenue From External Customer [Line Items] | ||||
Net sales | 152,818 | 212,634 | 343,687 | 409,772 |
Surgical Support [Member] | ||||
Entity Wide Information Revenue From External Customer [Line Items] | ||||
Net sales | $ 50,794 | $ 79,471 | $ 119,806 | $ 157,109 |
Business Segment, Product and_4
Business Segment, Product and Geographic Information - Schedule of Net Sales and Net Property and Equipment by Geographical Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Revenues and Net Property and Equipment by Geographical Areas [Line Items] | |||||
Net sales | $ 203,612 | $ 292,105 | $ 463,493 | $ 566,881 | |
Property and Equipment, Net | 279,162 | 279,162 | $ 266,318 | ||
United States | |||||
Revenues and Net Property and Equipment by Geographical Areas [Line Items] | |||||
Net sales | 161,457 | 236,128 | 365,489 | 458,941 | |
Property and Equipment, Net | 228,882 | 228,882 | 218,771 | ||
International [Member] | |||||
Revenues and Net Property and Equipment by Geographical Areas [Line Items] | |||||
Net sales | 42,155 | $ 55,977 | 98,004 | $ 107,940 | |
Property and Equipment, Net | $ 50,280 | $ 50,280 | $ 47,547 |
Commitments (Details Textual)
Commitments (Details Textual) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | |
Commitments And Contingencies Disclosure [Line Items] | |||
Restricted cash for security deposit | $ 1.5 | $ 1.5 | |
Lease, practical expedients, package | true | ||
Executive Severance Plans [Member] | |||
Commitments And Contingencies Disclosure [Line Items] | |||
Other commitments, future minimum payments, remainder of fiscal year | $ 16.8 | ||
Corporate Office Facilities [Member] | |||
Commitments And Contingencies Disclosure [Line Items] | |||
Lease payment obligations | $ 58.8 | ||
Lease term | 15 years | ||
Minimum [Member] | |||
Commitments And Contingencies Disclosure [Line Items] | |||
Initial terms of lease | 1 year | ||
Maximum [Member] | |||
Commitments And Contingencies Disclosure [Line Items] | |||
Initial terms of lease | 17 years |
Commitments - Right-of-use Asse
Commitments - Right-of-use Assets and Lease Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Assets | ||
Operating | $ 105,863 | $ 66,932 |
Financing | 2,552 | 1,453 |
Total leased assets | 108,415 | 68,385 |
Current: | ||
Operating | 7,502 | 5,567 |
Financing | 1,231 | 672 |
Long-term: | ||
Operating | 114,881 | 73,153 |
Financing | 1,462 | 905 |
Total lease liabilities | $ 125,076 | $ 80,297 |
Weighted-average remaining lease term (years) - operating leases | 13 years 2 months 12 days | 12 years 4 months 24 days |
Weighted-average remaining lease term (years) - finance leases | 2 years 1 month 6 days | 2 years 3 months 18 days |
Weighted-average discount rate - operating leases | 5.50% | 7.30% |
Weighted-average discount rate - finance leases | 5.10% | 5.40% |
Commitments - Lease Costs, Cash
Commitments - Lease Costs, Cash Payments and Operating Lease Liabilities Arising From Obtaining Right-of-use Assets under Operating and Financing Lease Obligations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Lease expense: | ||||
Operating lease expense | $ 3,953 | $ 2,964 | $ 7,460 | $ 5,786 |
Finance lease expense: | ||||
Depreciation of right-of-use assets | 305 | 99 | 563 | 197 |
Interest expense on lease liabilities | 31 | 12 | 59 | 26 |
Total lease expense | 4,289 | 3,075 | 8,082 | 6,009 |
Operating cash flows used for operating leases | 3,700 | 3,153 | 6,996 | 6,172 |
Operating cash flows used for financing leases | 31 | 12 | 59 | 26 |
Financing cash flows used for financing leases | 295 | 93 | 542 | 185 |
Total cash paid for amounts included in the measurement of lease liabilities | 4,026 | 3,258 | 7,597 | 6,383 |
Operating lease liabilities arising from obtaining right-of-use assets | $ 543 | $ 2,496 | $ 39,805 | $ 77,605 |
Commitments - Future Minimum An
Commitments - Future Minimum Annual Lease Payments under Operating and Financing Leases (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Financing Leases | ||
Remaining 2020 | $ 662 | |
2021 | 1,226 | |
2022 | 864 | |
2023 | 74 | |
2024 | 9 | |
Total minimum lease payments | 2,835 | |
Less: amount representing interest | (142) | |
Present value of obligations under leases | 2,693 | |
Less: current portion | (1,231) | $ (672) |
Long-term lease obligations | 1,462 | 905 |
Operating Leases | ||
Remaining 2020 | 6,974 | |
2021 | 13,798 | |
2022 | 13,332 | |
2023 | 12,991 | |
2024 | 11,995 | |
Thereafter | 116,884 | |
Total minimum lease payments | 175,974 | |
Less: amount representing interest | (53,591) | |
Present value of obligations under leases | 122,383 | |
Less: current portion | (7,502) | (5,567) |
Long-term lease obligations | $ 114,881 | $ 73,153 |